2012 Alberta election post-mortem

I ended up ordering special software to get around the Great Firewall of China such that I'm not blocked from blogging after all (at least for this week, not sure yet if I'll renew).

In my last post I had considered expressing my suspicion that Wildrose would skid in the end because they were taking the populist route to such an unprecedented degree I wondered whether they could really drive straight into the teeth of "elite" opinion and win. I hinted at this when I noted that the federal Conservatives are not always offside with the public policy establishment and but declined to make a prediction since I did not really understand why Wildrose was riding as high in the polls as they were and my on-the-ground experience as a candidate in 2008 taught me that it's very difficult to predict without polls, never mind with them. I also thought it was a strategic mistake for Redford to make an issue about the "conscience rights" the Wildrose platform calls for and I'd stand by that in terms of keeping many traditional PC party voters home but I neglected to consider how she might pick up traditional Liberal and NDP voters to more than make up for the PC voters that might well have been long gone anyway.

I recall reading somewhere that when it comes to Canadian elections, the safest bet is on the most boring outcome and that certainly seems to be true in Alberta. The PCs go into the election with 60-some seats and they go out with... 60-some seats. La plus ça change, plus c'est la même chose...

First, the best and worst outcomes of the night in terms of riding wins and losses:

MOST DISAPPOINTING:

Paul Hinman's failure to get re-elected in Calgary Glenmore is surely disappointing but creates a very important thought point that might get the Wildrose braintrust to rethink the road they have gone down. We win Glenmore in 2009 even before Danielle became leader, never mind before Rob Anderson was brought in and Tom Flanagan put in charge of policy, and we lose it in 2012. Hello! By far the biggest story of the night is the way urban voters turned away from Wildrose at the last minute and aside from Heather Forsyth, who enjoyed the advantages of incumbency, the only riding inside Edmonton or Calgary city limits to go Wildrose was Calgary-Shaw. Paul's fate, and the fact that Link Byfield didn't win anyway despite the current Wildrose obsession with the land bills, ought to be cause for pause but given that the Globe is reporting that on election night "Ms. Smith said her first priority as Leader of the Opposition will be rural issues" (and, according to other sources, won't do interviews today) suggests to me that perhaps she's OK with the party's current stance and isn't going to make a serious bid for premier in 2016 after all. With an overwhelmingly rural caucus seeking its own re-election, Danielle will have to have the confidence to push back against the flow if she's going to position Wildrose as any more urban friendly going forward.

The greatest disappointment then, in my mind, is not Calgary Glenmore which might prove instructive but Todd Loewen's loss in Grande-Prairie-Smoky. Todd is no political opportunist. We both ran under the Wildrose Alliance banner in 2008 and I thought the party was very fortunate to have Todd leading the way as our organizer in the Peace Country. For a conviction politician he is still very sensible and a great guy to work with.

MOST ENCOURAGING:

Doug Griffiths is by far my favourite Progressive Conservative and I would like to be non-partisan enough to say his win, which makes him the southernmost rural PC MLA excluding Banff, best result but the fact he has helped put Redford the Red (or "Alison Redflag" as my mother says) back into the premier's office restrains me. So I'm going to go with Shayne Saskiw's election as most encouraging.

As the only Wildroser elected north of Ponoka, Shayne's going to have even more influence than he already has on the party. I've boosted Shayne on this blog in the past and I'll admit that a good part of my enthusiasm is based on his resume. I just happen to think the resume is very important since legislator is, after all, a job. I haven't met Shayne personally and have heard mixed things about his character. I do know that he's no Todd Loewen when it comes to commitment to the conservative cause since after calling me in 2008 to say he supported my campaign (he lived near the Edmonton Clareview LRT station at the time) he later indicated on his Facebook page that he was a supporter of the not-very-nice and not-very-effective PC candidate who ran over me in 2008, Tony Vandermeer. That said Shayne is highly qualified to be a MLA and defies the hillybilly stereotype.

What to say about the result generally? The political career of Ted Morton should have created more doubt about whether Wildrose would triumph once voters stopped telling pollsters the uptrending newish party was their choice and actually dwelt on whether they supported a party that chose to pick a fight with the Globe and Mail and the "elite". Look at today's G&M editorial and what do they express concern about? "... public-sector pay in Alberta rose by 119 per cent in the first decade of the 21st century, a rate almost double that of the rest of Canada." We heard very little about this issue from Rob Anderson and the Wildrose, and into the vacuum entered old comments by Wildrose candidates Ron Leech and Alan Hunsperger. I understand the gameplan did not call for a vacuum and Flanagan's Five Points were supposed to be the focus of attention but if the media doesn't do it the voters at least will try to set up the election as some sort of choice and there's minimal controversy in an "Accountability Act." Who is going to choose against that? If there were any back-and-forth on any of the Five Points, it would actually work against Wildrose because the media would start quoting pundits who were not keen on the economics of what was being proposed. Wildrose was thus left in the position of having to hope to just coast through the final week of the campaign. But a flare up will be invented if necessary and sure enough social issues hit the headlines. I believe the electorate may have still understood the Leech and Hunsperger remarks for what they are, which is of marginal relevance to how a Wildrose government would actually govern, if Danielle herself had not waded into the climate change issue like she did. It may well have galvanized voters into concluding that perhaps Wildrose truly intends to go to war against the "elite" and the foreigner which would in turn have consequences for Alberta's reputation if her party formed government. I have my own doubts about the climate change "issue" if not climate change itself but I look at the facts and don't put myself into the position of looking foolish should evidence emerge that was absolutely undeniable and unquestionable. Compare here again to the Harper Conservatives. Harper gets the votes of climate change deniers without standing up and explicitly denying himself.

Too many federal Conservative tactics and policies were imported into Wildrose without consideration of the fact that the feds have government experience and a corresponding familiarity with where the civil service stands and with where public policy experts are coming from. Vitor Marciano even admitted that the $1000 keep quiet bond was demanded of candidates for the simple reason that the federal Tories demanded the same thing. Fact is regional identification is a huge issue that drives Alberta's support for the Harper team and in turn has limited Wildrose to Alberta's rural south. Consider the fact that PC incumbent Hector Goudreau edged out the Alberta Alliance candidate 3670 to 3332 in Dunvegan-Central Peace in 2004 and in 2012 edged out the Wildrose candidate 3983 to 3756. You're not winning the rural north anyway, so why not go for the urban vote, which means enough with the dumping on anyone who might be at all cosmopolitan! Wildrose was crushed in Edmonton Whitemud, 12087 to 3381, but this is an area where the left wing would never have a chance. Edmonton's southwest happens to be one of the most educated areas in the province demographically. Last summer's HST referendum in British Columbia saw the most educated ridings vote "Yes"; more and more votes were coming over the the Yes side as the months went by such that a victory there was entirely possible had their been more time. Yet the current strategists in Alberta's Wildrose party would continue to scoff at any suggestion that the party take a chance by backing an expert supported policy like the HST. Be that way then but consider whether repeating your 2012 campaign in 2016 is going to get you any closer to government.

a Wildrose government?

I'm at Vancouver airport waiting for my flight to Shanghai to board and once I arrive there I'll lose easy access to Twitter and Blogspot so I'll seize my one and only chance to comment on the Alberta election.

The prospect of a party that I was heavily involved with in 2007, 2008, and 2009 forming the government is an exciting one, after all, I don't regularly see people I've met personally on several occasions like Danielle and Link Byfield on TV never mind in positions of power. But the reality is this isn't the same party that I ran as a candidate for in 2008 and I'm not along for the ride this time.

Did it have to be this way for me? I've reflected on the what's happened since the beginning of 2010 and have concluded that the January 2010 floor crossings were the most decisive event of Wildrose history. It's true that Link was playing a dominant role in the party since 2007 and Danielle assumed the leadership in 2009, but frankly I don't see how Danielle has taken the party in a direction that wasn't in notable ways foreshadowed by Link early on. Link once asked me about agricultural policy and who amongst my acquaintances in the U of A faculty might help develop policy that would appeal to rural voters. This isn't the starting point for policy development that I'm accustomed to, of course. At Finance Canada, although there were certainly exceptions (such as the GST cut and the tax credits for kids sports), we started with a policy problem (such the the fact the income trust form of business organization was on track to dominate the way businesses are organized in this country) and then looked for solutions. A fellow MBA student who worked at Ag Alberta at the time told me that the civil service is well acquainted with the fact the rural voter runs the show in this province. I'm supposed to figure out a way to out-pander the PC party regarding rural votes?

If Link still envisaged some sort of role for me in the party with respect to policy this seemed to be further put away when Tom Flanagan was invited to address a group of Wildrosers on November 28, 2009 at the Calgary Airport. Flanagan basically laid out the plan that Flanagan is now following closely in April 2012: 1) ignore the membership (or expert?) created policy platform as much as possible, which just gives more targets for the competition 2) lock down communications and 3) run on 4 or 5 policies developed by a couple people at the top of the party. I told Link at the time I wasn't keen on Flanagan's prescription and the most striking thing for me was the incongruency between this and Link's frequent calls for having the grassroots determine the policy. For a long time Link's theme was that the Alberta PCs were top-down and controlling while Wildrose will take its direction from the little guy. For an even longer time my concern was that there wasn't enough opportunity for expert input into the policy process, yet at the end of the day the mass participation policy conventions did not end up mattering a great deal. Belinda Stronach was guilty of "venal ambition" according to Link but not those that cross to Wildrose? Belinda makes the Wildrose eminence grise "gag" but a $20K payout to a floor crosser's constituency association to help ensure the crosser keeps his or her job is just the cost of doing business, apparently. Fact is, I might have been able to stomach the crossings had there been any transparency surrounding what the terms were.

But it was never clear that I could never work with Link. And I never had a problem with Danielle besides her never giving any evidence that she was prepared to pull rank on Link and Rob Anderson. A telling example was Danielle's conversation with iNews880 reporter Liza Yuzda about the floor crossings on January 5, 2010:

"You would be asking both Heather and Rob to step down for a period of as long as six months," [Danielle said, re why standing for byelections were not demanded of the floor crossers], "because the by-election would be called at the pleasure of the current sitting government and I can imagine they wouldn't make it all that easy for either of them to be without an income for six months." [Smith added that Wildrose] party policy had been to require a by-election for 'floor-crossers' but, when it came to reality, they had to make a decision that worked for everyone.

There, in a nutshell, you have Danielle essentially admitting to more than what she was compelled to. In a word, I trust Danielle. When I once scratched my head about why she hired Stephen Carter, someone with bad debts and who didn't seem especially committed to the (at least then) Wildrose philosophy of government, she gave me a personal explanation at that November 2009 event. She surely didn't have to, but cared about what I thought. Rob Anderson's first impulse, in contrast, is to deny. "I really can't remember ... who asked for what" concerning the terms of the floor crossing, says Anderson. Yet "the CBC has obtained an email sent by Anderson to the party. In it, Anderson states that there was an arrangement made with leader Danielle Smith for that money — an arrangement made prior to Anderson and Forsyth crossing the floor." Bottom line is that I don't believe Anderson does not remember. Anderson once told me, "I clearly support “right to a secret ballot.” In fact, that topic never even came up at the convention - there was never a resolution vote." I checked the facts and this simply was not true. A measure calling for replacing this clause with some meaningless generic verbiage calling for "fairness" was "PROPOSED BY CAUCUS" and since I don't believe for a minute that Paul Hinman, a conscientious true conservative advocate for individual freedom, would support this measure this was necessarily a floor crosser's initiative.

Link was prepared to at least humour some of my ideas, like the tax talk that PC MLA and PC leadership candidate Doug Griffiths was trying to advance. I would be cautious about trusting Link with provincial money, not least because of what I've heard from Link's former Alberta Report employees (and, I should say, the financial relationship between Link's "Citizens Centre for Freedom and Democracy" and at least the early Wildrose), but as difficult as it would be with Link, it'd be even harder with Rob, and Rob seems to have a interest in Finance such that I would somehow have to find a way to act as an advisor to Rob on the file or be his parliamentary secretary if I ran for office again myself or something of that sort.

Now I'll grant that a possible solution would have been for Rob to have to accommodate me instead of the other way around. But that just wasn't in the cards when he crossed the floor and become the party's Finance critic. He became the "caucus" whereas I was just another party member. I would have had to have been on an equal standing which in turn would've meant running for the PCs in 2008 and crossing the floor like he did. And run for the PCs in 2008 I could not have possibly done. Rob is the odds on favourite to become Alberta's next Minister of Finance and I believe when he sits down with his civil servants and looks at the deficit problem for what it is it'll be clear to him that the real origin of the current deficit is the natural gas royalty fueled spending of 2006-2008. It is far easier to limit spending increases than to actually cut, and missing the opportunity to exercise restraint with natural gas royalties (which won't be returning to anything like their former level) has put the province into the position of having to make decisions that I don't think Rob is prepared to make, other than cutting the easy targets like the infrastructure budget.

Which brings me to the Wildrose's 5 point campaign plan. As so ably noted by former Liberal leader Kevin Taft, Alberta's failure to save is a grave disservice to future generations, and infrastructure spending is the one form of spending that at least leaves a potentially enduring physical asset behind after the cheques have been cut. But buildings don't vote and the civil service unions, along with the ordinary guy promised a handout, do. The tax breaks for families that engage in government approved activities is a left wing spending program in conservative guise. The (largely) non-partisan economists over at TaxVox have been complaining about this fragmentation of the tax code in North America for a long time now and conservative economists understand this point. The promise to pay out energy revenue to Albertans means the Heritage Fund faces even longer odds of ever actually growing in a significant way. A tax cut would at least create incentives to add to the economy and lower royalties would at least leave more money in corporate hands that are in a position to invest in property, plant, and equipment that could ensure more and higher royalties in the future. An unconditional cheque paid for simply existing arguably reflects the ultimate entitlement mentality. Besides the fact this is pro-cyclical and may well just drive inflation across the province, the "only if not in deficit" condition is not an economically significant condition. Why? Because what matters is net asset position. Running down the province's assets to fund current consumption does not become a better idea by looking at periodic income statements as opposed to what's happening to the balance sheet. It was, after all, the "we're not in deficit" argument that justified the circa 2007 spending spree that has make it so difficult to get out of deficit now.

When Danielle slammed "the Globe and Mail and the elites" I could only shake my head (again). The fact is that if the party had even one headline plank that economists, even just conservative economists, would support the Globe, or at least the Globe's Economy Lab, would help sell it. Witness the federal Conservative plan to cut corporate taxes.

Now maybe it's just me. It may be worth noting I also fell out with the local riding association, some of whom accused me of being a carpet bagger from the north side, and I have to admit I never did close a deal for a home in Ambleside in the end. I note that Edmonton South-West has decided to run a controversial candidate in any case.

I fell off the wagon because of ideas that are, well, ideas. Perhaps I'm just too abstract a personality. But living in the world as if it were the world you believe it ought to be is perhaps the only way to live in the world as it is.

"He goes away from a living woman to celebrate his pitiless wedding with a shadowy ideal of conduct. Is he satisfied - quite, now, I wonder?"

- Joseph Conrad, "Lord Jim"

State of the Rose: Wildrose vs libertarians redux

A lot happened in Alberta politics during 2011 and had I not been in China for most of the year I would have felt compelled to comment on several occasions. To start by picking just one incident, I'll take note of former federal Libertarian Party leader Dennis Young's disqualification as a Wildrose candidate.

When Daveberta blogged about this on October 19 I could only shake my head. Think of the time and grief you could have saved yourself, Dennis, had you read my blogpost from October 2010 about libertarians' place in the party consequent to the expansion of the caucus in January 2010! At that time I noted that "the fact that Cosh, Johnston, Brock et al have all gone off about this [caucus statement re Ontario prostitution ruling] suggests that these critics are voicing a view that is generally held." Evidently Dennis didn't share this general view or he would have been more circumspect about whether party HQ would support his bid to run in Calgary Hays.

Now it's true that no one in the Wildrose caucus has been as straightforward as US Presidential candidate Rick Santorum (photo at right). In June 2011 Santorum stated that he would "fight very strongly against libertarian influence within the Republican party and the conservative movement." I highly doubt that MLAs Rob Anderson, Heather Forsyth, Paul Hinman, or Wildrose éminence grise Link Byfield would ever say such a thing, not least because of Byfield's view that fiscal and social conservatives need to cooperate in order to win elections. But that doesn't mean that advancing a libertarian agenda within Wildrose wouldn't be a Sisyphean task.

After the 2010 AGM I welcomed Chris Jones' becoming Edmonton director for the party, noting that Chris would be a good advocate for Edmonton on the provincial executive. Apparently, he was too good an advocate for views the party poohbahs aren't inclined to indulge since I've recently learned (not from Chris) that party HQ has stalled on Chris' application to run in Edmonton Millcreek. Evidently headquarters is too busy invoicing the constituency associations for money to be sent to party central. I have to shake my head at the complaint about Chris I heard in 2010 from someone drawing a full time salary from the party that the Edmonton volunteer was too controlling. Who is controlling who here?

Does Wildrose offer the fiscal conservatism libertarians would be interested in? When the party is promising more education spending etc it's doubtful whether the commitment is more than rhetorical. In today's Throne Speech, it seemed that Premier Redford might actually put some effort into honouring her leadership campaign pledge to only route the first $6 billion of natural resource revenue into current spending and have the remainder go into savings. Given that more than $8 billion of non-renewable resource revenue is being spent annually, this leaves a real gap that will have to be closed by either spending cuts or tax increases. Either route is going to be unpopular, and if Redford doesn't try to wriggle out of this one she deserves credit for following through on a deficit fighting promise.

The elephant in the room with regard to spending remains, as I've long argued, the public sector unions. A recent U of Calgary study noted that "since 2000, the province’s public sector wage bill has shot up by 119 percent — almost double the rate of growth in the rest of Canada." Futhermore,

In 2000-01 total provincial revenues were $25.5 billion. In 2010-11 revenues grew to $34.0 billion, an $8.5 billion dollar increase. [meanwhile...] we see an increase in wages of $8.1 billion. In other words, 95 percent of the increase in provincial revenues over the last decade has gone directly into the pockets of public sector employees. The total wage bill rose to nearly 45 percent of total expenditure in 2010 from just over a quarter in 2000.

This is what happens when the public sector unions have the whip hand. I continue to have little faith that the Wildrose party's current leadership has the stomach to take them on. The breaking point for me was when Wildrose Finance critic Rob Anderson claimed that he supported the right to a secret ballot for union certifications despite the fact that at the 2010 AGM, the "caucus" (read Anderson and Forsyth) wanted to delete the party plank calling for a secret ballot. No libertarian should tolerate this interference with the economic freedom of the individual. While Alberta politicians continue to universally avoid any direct criticism of either unions or the salaries and benefits going to front-line public servants, Iowa Governor Scott Walker has put his job on the line with respect to the issue.

the Wikipedia agenda: civil liberties at the expense of the facts

Having returned to North America from several months in China I can only shake my head at the intensity with which the Wikimedia Foundation (WMF) finds an enemy of freedom in... the United States Congress.

The US government has been an enormous friend of Wikimedia Commons. Last year the National Archives and Records Administration contributed over 100,000 historical photographs to the Commons. So why go after a legislative body that has historically passed legislation that has been such a great boon to the public domain?

The short answer is the WMF took its eye off the public domain ball. If the WMF could convince other governments around the world to adopt the US practice of deeming the work of government employees done in the course of their official duties public domain, it would have a huge impact on the amount of free content available on the Internet. For evidence that the WMF is just not interested, look no further than the fact that, instead of setting an example by having the work of WMF staff deemed public domain, it's deemed "all rights reserved".

Over at Wikimedia Commons I've argued on multiple occasions that although the standard uploading tools direct uploaders towards licenses that range from totally free (public domain) to mostly free, the philosophy of the Commons is undermined by evaders who create their own "custom" licenses in order to add additional restrictions or, at a minimum, add language that appears to discourage free re-use. With the WMF itself being one of the offenders here, my arguments have gotten little traction in discussions that are overwhelmingly dominated by content creators who have an incentive to protect author rights at the expense of users.

Is there any chance that the WMF might support a "Keep the Commons Free" effort in the future? At the moment they are not just distracted by their so-called "Keep the Internet Free" campaign but obsessed with it to the point that the rhetorical excess they have engaged in has created a climate of fear and hysteria about supposedly infringed civil liberties.

On January 18, the Commons ran a banner protesting the anti-piracy legislation. Is this going to encourage anyone in Hollywood to ever donate something to the Commons in the future? Wouldn't a boost to the Commons just create a bigger platform for future advertising against the content industry's interests?

Also on January 18, all editors were locked out of editing the English Wikipedia. Well, almost all. WMF staff reserved the right to keep editing, and did, in particular WMF Executive Director Sue Gardner. What did they edit? A page the WMF took exclusive ownership of, with no opportunity for community collaboration in its development, and, more importantly, no presentation of dissenting views. How did they edit? In violation of community developed policies that included:

WP:Identifying_reliable_sources

- claim after claim, such as "as around the world, we're seeing the development of legislation that prioritizes overly-broad copyright enforcement laws, laws promoted by power players, over the preservation of individual civil liberties" is made with out a single footnote in the whole screed

WP:Wikipedia is not a soapbox or means of promotion
WP:Wikipedia is not here to tell the world about your noble cause

WP:Wikipedia is not a newspaper

- In the policy it says "Wikipedia should not offer first-hand news reports on breaking stories." Sue Gardner took it upon herself to advise her captive readers that "As of [update time here] PT, January 18, Google [News] has more than 4,600 articles about the blackout. Here are a few: ...."

WP:Wikipedia is not censored

- I couldn't help but notice the outrage some commentators on other websites directed at those who suggested ways of getting around the WMF-enforced January 18 censorship. No irony here if one is able to fully appreciate the "we had to destroy the village in order to save it" mentality, I suppose.

WP:Do not disrupt Wikipedia to illustrate a point

Wikipedia:Neutral point of view

- "NPOV is a fundamental principle of Wikipedia and of other Wikimedia projects. This policy is non-negotiable and all editors and articles must follow it," says the policy. We now know that there's an exception for "Wikimedia projects" that politick for "individual civil liberties" and editors with Wikimedia Foundation logins (which are only granted by the WMF). On the blackout page that the WMF monopolized Sue Gardner directed traffic towards the website of the civil liberties advocacy group the Electronic Frontier Foundation (EFF). Who sits on the WMF's Advisory Board? A former founder and chair of the EFF. Former WMF general counsel Mike Godwin used to be an EFF lawyer.

WP:Polling is not a substitute for discussion

- We're told that "Wikipedians have chosen to black out..." On what basis? A poll, and a poll of a small fraction of Wikipedians. The WMF tells us that "We are doing this for you" but "you", the non-Wikipedian reader, was never asked what you wanted. According to policy, "Elections and votes are only endorsed for things that take place outside Wikipedia proper" yet this "thing" most decidedly occurred ON Wikipedia. The WMF initiated a raw vote (in contrast with the more sophisticated preference rank sorting that personnel elections use) where ultimately the votes of apparent single purpose accounts counted for the same as that of veteran editors. When some editors attempted to steer the proceedings into more of a discussion, a WMF staffer shoved these efforts off into the obscurity of the poll's "Talk" page. That this Talk page was not considered relevant to the "community decision" as far as the WMF was concerned was further evidenced by the fact that the WMF blocked it on January 18 but did not block the poll page.

If Wikipedians have "chosen to black out" a global service and go to war with "Big media" it may be said Americans chose to invade Iraq in 2003. An ABC News/Washington Post poll taken shortly after the beginning of the Iraq war showed 62% support, higher support than for the global blackout of English Wikipedia (which was actually in the minority primarily because so many called for a US-only blackout). The fact of the matter is that the invasion of Iraq was not the culmination of a bottom-up grassroots movement. Likewise, the Wikipedia blackout was the brainchild of Jimmy Wales and the WMF. The editing community went along with it, in large part because they placed their trust in what they were being told.

The truth about SOPA/PIPA

What were they being told? That there was an existential threat to Wikipedia. Wikimedia general counsel Geoffrey Brigham did not mislead the Wikipedia community by painting a demonstrably false picture so much as by painting with strokes that went one way when it served the WMF's desire to politically mobilize the community and with strokes that went the other way when it didn't, such the picture that resulted was misleading and incomplete. He (and many other Silicon Valley-based activists) stretched the language of SOPA/PIPA to the breaking point in terms of breadth of interpretation, while simultaneously interpreting the language of the IRS' prohibitions against non-profit lobbying down to its narrowest. Had an advocate of equal standing been invited to present an alternative view to the Wikipedia community, there would, of course, have been far less reason for concern. Readers could have been pointed to Creative America's "Fact vs Fiction" with respect to the some of the provisions, to take but one example, and invited to draw their own conclusions. Instead, we get Brigham issuing a "call to action" that included directing readers to the virulently anti-Republican website Daily Kos (with DKos in turn directing its readers towards Jimmy Wales' poll). Brigham is also directing Foundation funds towards Washington lobbyists who are registered to lobby not only on "Copyright/Patent/Trademark" which is arguably related to public domain issues (I say arguably because, as I noted at the beginning of this post, there is a lot more that could be done to encourage content owners to voluntarily license their work for re-use as opposed to lobbying for the denial of legal remedies with the result that content owners are forced to allow re-use), but extends to "Civil Rights/Civil Liberties," which has no necessary connection to the definition of the public domain.

Partway throught the blackout Sue Gardner noted on the "Learn More" page (that the blackout page linked to) that the blackout page had received 90 million views and that there were more than a quarter million tweets an hour about #sopa. And just what was being tweeted? "If SOPA passes, there will be no more YouTube, Twitter, Google, Wikipedia, Facebook and many more sites you love to use!" or something similar. What happens when a lie is literally repeated more than a million times? Wikipedia, the information storehouse, played critical enabler to this massive misinformation campaign. According to Gardner, "in its current form, SOPA would require Wikipedia to actively monitor every site we link to, to ensure it doesn't host infringing content." Gardner's claim doesn't rise to the level of hysterical falsehood that the tweets rose to, but it's still highly dubious. If passed, these bills would require the search engines to put in some of the effort that Wikipedia currently puts in into avoiding links to sites dedicated to copyright infringement. Wikipedia is not a search engine and even if it was, the effort that is put in on Wikipedia to help protect copyright is more than enough to preclude Wikipedia ever running afoul of this proposed legislation. The only way Brigham was able to manufacture a threat to Wikipedia was by denying that these efforts exist, claiming that linking to the Pirate Bay is a "totally legitimate link" on Wikipedia.

This is not the case. WP:ELNEVER says that "editors are restricted from linking to the following, without exception: Material that violates the copyrights of others..." adding that "Knowingly directing others to material that violates copyright may be considered contributory copyright infringement.... Linking to a page that illegally distributes someone else's work casts a bad light on Wikipedia and its editors." Wikipedia's external links policy goes on identify "content that is illegal to access in the state of Florida (since Wikipedia's servers are located there)." If your internal constraint is to follow the external constraints imposed by the United States government, by definition the government would not be imposing any incremental coercion. The immediate response to this last point, of course, is that Wikipedians have absolute standards. To this I'd make two observations: 1) This is a moral argument, not a legal one, such that Brigham's legal opinion should be downweighted to that of the rest of us 2) Where were these absolute standards before? "Fair use" images are not hosted on the Commons, but they are on English Wikipedia. Why? Because most non-US jurisdictions are more restrictive about "fair use." Where is the protest to shut down various Wikipedias until foreign governments liberalize fair use? This has a direct and indisputable impact on the content of these non-English Wikipedias, yet they have apparently just passively accepted their legal environments.

The Left Coast Agenda

The obvious explanation for this anomaly is that the WMF has a US-centric view. Jimmy Wales insists that the anti-piracy laws would set a "precedent" for censorship yet the Attorney General can already order U.S. Internet service providers to block access to child pornography. As the Boston Herald notes, "thank goodness, Google and Wikipedia have thus far raised no objection [to that]. This week Jimbo told CNN that "this law... at least the Senate version, would include the creation of a DNS (domain name system) blocking regime that's technically identical to the one that's used by China. " First of all, besides the fact that the House dropped DNS blocking from its bill and the Senate bill will eventually have to be rendered compatible the House's bill, the Senate bill's sponsor indicated prior to Jimbo making his charge that he's prepared to drop it, saying "I regret that law enforcement will not have this remedy available to it..." When somebody is waving the white flag in my view the proper course of action is to hold fire and discuss surrender terms. Secondly, see this editorial from December 29 on the DNS issue, which I need not repeat here. Thirdly, while the rest of Wales' claim here is technically true, it doesn't have what I'd call truth value, truth value being that it would support the point trying to be made if all the facts were out there. I walk on two legs. So do the Chinese! Does anything sinister follow from that? For Wales to have an argument it would have to be the case that DNS blocking is somehow exclusive to authoritarian regimes. In fact, the Netherlands, Austria, Belgium, Denmark, Finland and South Korea all engage in DNS blocking. Where was Jimbo and the rest of the WMF earlier this month when two Dutch ISPs were ordered to block access to the Pirate Bay? Out organizing Dutch Wikipedians in order to protect their right to link? Correct me I'm wrong, but the WMF didn't so much as even put out a token press release. Did you know the dastardly Danes censor or ban over 3,500 sites? I do, but no thanks to any WMF awareness raising effort. Where was the WMF when the Sydney Morning Herald reported in late 2010 that Australia's list of blacklisted sites could increase from 1,370 to around 10,000 sites? Or when the "Australian communications regulator [] issued a stark warning that websites who link out to 'banned' hyperlinks are liable to fines of up to Aus $11,000 a day." Why hasn't the WMF complained about Wikipedia's blacklists in the name of free information, e.g. from a unanimous ArbCom decision dated 20 October 2006: "A website that engages in the practice of publishing private information concerning the identities of Wikipedia participants will be regarded as an attack site whose pages should not be linked to from Wikipedia pages under any circumstances"? Is this not censorship?

Answer: in San Francisco. As the Financial Post has reported, after former CBC documentary producer Sue Gardner became Executive Director of the WMF, Wikimedia moved to the west coast "where it would be in close proximity to the bright minds -- and big wallets -- of Silicon Valley." Today, of course, the WMF is furiously denying that these "big wallets" have anything to do with anything. Today CBS News reported that "behind the protests and public posturing, both Hollywood and Silicon Valley spend generously to lobby causes in Washington. According to the Center for Responsive Politics, the movie, television and music industries spent a combined $91.7 million on lobbying efforts in 2011, compared with the computer and Internet industry's $93 million." One of the Q and As the WMF put up on the "Learn More" page that got millions of views today was "I keep hearing that this is a fight between Hollywood and Silicon Valley. Is that true?" "No," we are told. Don't trust these mainstream media reports. We're Wikipedia and we're on the side of the angels! Never mind that there's no citation for this claim. Trust us! It's the little guy vs the Corporate Agenda; that we happen to be pushing Google's interests is irrelevant, as is the fact Google's founder bankrolls the WMF. What's particularly dodgy about this monied interests line is the fact that it would have cost an enormous amount had this colossal PR exercise been paid for by anti-SOPA advocates at market rates. That market value was created by the cumulative, collective effort of an enormous number of editors over several years, a small fraction of whom then decided to follow the WMF and take Wikipedia away from editors like me to use as they saw fit.

The Financial Post story goes on to note that "to many outsiders" Gardner's mixing of fundraising efforts with selected editors and writers of Wikipedia could create dubious optics with regard to how independent Wikipedia's content is. Not a problem, in Gardner's view. Zack Exley, the longtime leftist activist and internet rabble rouser, has the file firmly in his non-partisan hands. Gardner recently cited Exley's activist history as a likely asset in the lead up to today's blackout. For her own part Gardner joined Occupy Wall Street in November and afterwards called on Wikimedia to "copy OWS tactics." In a blogpost she recommended that readers consult Feministing and The Nation, a self-described "flagship of the left."

Given this background, was there any way to stop the WMF initiated propaganda campaign that went down this week? The one opportunity I saw for something of a correction was ensuring some balance in Wikipedia's SOPA and PIPA articles. It was announced on Monday that these would remain unblocked. Concentrating on the PIPA article, I added some of the observations of people who were in a position to have an informed understanding of the bills. I noted that US Chamber of Commerce executive David Hirschmann, who is also President of the Global Intellectual Property Center, said the talk of freedoms and censorship "has nothing to do with the substance of the bills." I added the fact that a 2009 paper by the Information Technology and Innovation Foundation (ITIF) titled "Steal These Policies" formed the basis of the current anti-piracy bills. What I didn't make entirely explicit but independent readers should know is the fact that ITIF is largely funded by Silicon Valley, not Hollywood. I added ITIF fellow Robert Bennett's observation that "[t]he critics either don't understand what the bills do or are misrepresenting what the bills do. There's sort of a hysterical climate of criticism where people are objecting to something the bills don't do and are promoting noble causes like free speech and democracy but there is not much connection between what they are complaining about and what's in the legislation."

There was, of course, still a lot of material from expert sources that were out there that I didn't have time to add before the blackout. For example, Hillel I. Parness, an intellectual property lawyer who also teaches at Columbia's School of Law, looked at SOPA/PIPA back in November and concluded that the US government could not take down a website unless it demonstrated, to a judge, that the intention of the allegedly rogue site was to "willfully" violate one or more specific instances of copyright. Parness has also debunked the notion that the government could "go after YouTube" (even though Google's internal documentation once identified Youtube as "completely sustained by pirated content" and a "rogue enabler of content theft"). On top of this, of course, is the fact that since Parness' review the DNS blocking provisions have become all but defunct.

Parness points out that the legislation proposed here does not break new ground,"Therefore, if there was a risk of abuse, that risk has always been there. And I have confidence in the structure of our court system, that the prosecutors and the courts are held to certain standards that should not allow a statute such as this to be manipulated..."

A question I ask of Wikipedians who want to use Wikipedia for political lobbying is why they have so little confidence in America's prosecutors and judges and so much confidence in the WMF. The WMF's spending has soared since 2007 and less than half of the current spending goes towards the Technology Group. According to Gardner, this blackout "open[s] the door for more advocacy."

If there is to be any pushback against the censorship hysteria that has been manufactured, it would likely come from mainstream media scrutiny, ie some of the same "power players" the WMF denounced today. Why? Because besides the fact the major papers are serious about fact checking, network TV in particular often invites two guests whereby viewers can get both sides of the story.

As one music industry spokesman said, "It’s a dangerous and troubling development when the platforms that serve as gateways to information intentionally skew the facts to incite their users and arm them with misinformation." Just because I entirely agree does not mean I'm in Hollywood's pocket.

UPDATE (January 19):

I asked Sue Gardner, Zack Exley, and Geoff Brigham if they had any corrections to this account. Mr Brigham objected to some quotes, insisting he was "joking." I accordingly removed the quotes as I had not presented them as jokes.

I've asked Mr Brigham if he sees any possibility that the IRS, in reviewing the WMF's tax status, could consider the blackout to be an "in kind" contribution to the anti-SOPA lobby (ie assess the promotion at its fair value in the online advertising market).

Yesterday RIAA CEO Cary Sherman observed that "it's very difficult to counter the misinformation while the disseminators own the platform."

I tried, Mr Sherman. I really did. Even a fat cat executive like you doesn't deserve to be effectively censored. I followed Sue Gardner's editing of the message during the blackout, noting the changes by updating the history page. But I was locked out of editing as was everyone else who wasn't a WMF person.

She owned the platform and I didn't.

UPDATE (January 21):
See Nick Poole's remarks in this comment thread of a Wikipedia blogger.

UPDATE (February 7):
Bill Keller has written one of the most even-handed reviews of this issue that I've seen.

Alberta politics in downward spiral

Although I could continue to blog from China if I bought a monthly subscription to a VPN service, use of Twitter, Blogger, Youtube, Facebook etc is not so essential for me that I can't just wait until I return to Alberta (probably after Christmas) or am visiting somewhere else. Given that I'm in South Korea this particular week, I will seize my chance to note how the Alberta political news that has emerged over the summer has been increasingly depressing.

To begin with the Wildrose, I've noted before that when the party leadership has rolled out what it says is the party platform, it has deviated from both conservative principles and what the party membership has historically supported, an example being the leadership's announcement that provincial achievement tests (PATs), something that the teachers' union has long opposed, should be killed off. As I noted at the time, the move put the party to the left of Red Tory Dave Hancock. As an aside, one has to feel a bit for the current Education Minister, because not only have Hancock's defences of testing now been rendered for naught by Premier-designate Alison Redford's promise to axe the tests (amongst other accommodations of the Alberta Teachers' Association agenda), but he took political fire for deficit easing cuts to his ministry while his new boss Redford scooped the easy political payoff that came with promising to promptly reverse those cuts. When I called attention to the fact that the Wildrose leadership's assertion that the PATs are "outdated" or "inadequate" clearly was not coming from either the grassroots or conservative pundits, I pointed the finger at floor-crossing MLAs Rob Anderson and Heather Forsyth, who showed their hand when they lobbied for union-friendly changes to party policy at the 2010 Wildrose AGM. Given that "caucus" had also elected to attack the party's free speech plank which called for the repeal of Bill 44's section 3 at that time, I am hardly surprised to learn that the recently rolled out party leadership position on human rights essentially caves on this issue as well.

Couple this with reports that party HQ is trying to suck up dollars from the constituency associations to support high spending (and salaries for staff who are hired and fired based on the leader's own counsel as opposed to constituency association recommendations) and I'm also not surprised to learn that several of the most gung-ho party organizers in Edmonton that I knew have finally thrown up their hands in frustration this summer.

Wildrose Finance critic Rob Anderson doesn't seem to be willing to go after health spending, education spending, or spending on unionized civil servants at a meaningful level of specificity. Hence Anderson has directed most of his fire at infrastructure spending, which happens to be the one form of government spending that actually creates economic growth. According to StatsCan, "Between 1962 and 2006, roughly one-half of the total growth in multifactor productivity in the private sector was the result of growth in public infrastructure." If this is how it is going to be, I'd sooner support a Liberal like Kevin Taft. Unfortunately, the Alberta Liberals have taken themselves quite completely out of the running as the thinking man's choice given that new Liberal leader Raj Sherman's idea of opposition seems to be leveling implausible allegations of conspiracy and coverup. Meanwhile Liberal MLA Hugh MacDonald, who earlier this year I identified as "easily the most effective MLA on the Heritage Fund committee," has left the party.

As for the governing party, the leadership vote has proven a grave disappointment. Instead of bringing some vitality to the Liberals or the Alberta Party, many people affiliated with the centre-left apparently decided to instead try to advance their agenda within the PC party, thereby making that particular tent even more suffocatingly huge. Former Liberal MLA Maurice Tougas has described the elevation of Alison Redford to the Premier's office as "a potential neutron bomb" that could destroy the Alberta Liberals.

Supposedly Alison Redford has influenced South Africa's legal system via her work with Nelson Mandela as a human rights lawyer. Although South Africa's 1996 constitution is "widely regarded as one of the most progressive in the world," the level of racial hatred and violence in South Africa is disturbingly high, notwithstanding the fact many liberals are relatively unconcerned because, unlike in the apartheid area, the violence has been privatized. While acknowledging that Redford has been generally effective on the crime file as Justice Minister, one of the classical differences between liberals and conservatives is that liberals are considerably more agitated about state coercion than private coercion and Redford's resume gives little confidence that she would be immune to the classic liberal syndrome of overestimating the extent to which government legislation can improve reality on the ground for private citizens. In 1997 Mandela, Redford's supposed mentor, bestowed one of South Africa’s highest honours on no less a humanitarian than Col. Qaddafi, saying “those who feel irritated by our friendship… can go jump in the pool.”

Redford promised that she will "ensure that caucus understands that their role in the future of government decision-making is critical," yet immediately upon becoming premier-designate she waved off any role, even superficial, for the elected opposition by declaring that the Legislature will not sit this autumn.

Most disturbing, however, is how exceedingly facile Redford's policy positions are. Given that any focus group or poll will tell you that health and education, especially health, are the public's top priorities, it is entirely unoriginal for a politician to say that these are her top priorities. Does she at least have some imaginative ideas for new revenue sources? Apparently not, since we're told she's been eyeing the Sustainability Fund to support her spending promises. This in contrast to leadership contender Doug Griffiths, who has took it upon himself to try to actually lead by challenging the public to think about fiscal sustainability challenges and in particular a retooling and modernization of the tax code. We know what Griffiths would have done with the briefing memos that reached his desk; he'd have been open to their arguments and, if convinced, would've tried to build popular support for moving in an unpopular but necessary direction. Yet the imaginative and intellectually curious Griffiths only managed to get first round support in the single digits. Redford is said to be a quick study, but it ultimately doesn't matter how smart a committed populist is since the policies will still be assessed on their popularity, not the strength of their supporting research or sophistication. How is Redford going to pay for her proposed $1500 Family Recreation Tax Credit, which is essentially another spending program despite its "tax credit" name and further narrows the tax base, a trend that is being widely lamented by contemporary tax economists, including those in Canada.

To those who dispute my line of argument here, I would call attention to Redford's lack of significant support from other elected representatives of her party. Representative democracy is marginally more likely to be fiscally disciplined that direct democracy, simply because representatives as a group are responsible for a coherent budget while general referendum voters can consider spending proposals in isolation. The art of serving as an elected representative is to a large degree the art of getting credit for spending and/or tax cuts while avoiding blame for spending cuts and/or tax increases. Pulling this off as a political party requires a disciplined team strategy, lest individual representatives break ranks to demand more spending or more tax cuts from their party while leaving responsibility for funding these demands on the party instead of themselves. It is this idea that left me distinctly unimpressed with the antics of Guy Boutilier, Raj Sherman, and now Alison Redford. As Sherman and Redford became popular with the public, they were in turn unpopular with their long-time party colleagues.

If it weren't for energy royalties that essentially knock 30% off the price of public services, there would be no way that Alberta could afford Premier Alison Redford.

Romney sells out again

I have been in China for a few weeks and expect to be there for a few months yet. I had worked out a tunnel that allowed access to Youtube, Facebook, Twitter, and Blogger but it has since been filled in (this may be an argument for blogging via Wordpress).

I have made a weekend trip to Vladivostok, Russia, however, and will use this opportunity to quickly state that I have lost what enthusiasm I may have had for the candidacy of former Massachusetts governor Mitt Romney for the Republican 2012 nomination.

Apparently Romney has declared without ambiguity that "I support the subsidy of ethanol." Yet another case of a supposedly conservative politician opposed government spending except when they are for it. Now there are a variety of things which rightly call for some government support, but subsidizing the production of something which encourages the conversion of natural wilderness to farmland (not directly in the North America, but indirectly through the global food chain) is not one of them.

MPT gives thumbs up to Garth Turner

As I noted in my last post, Stephen Gordon has got it right on corporate taxation. Unfortunately he has it wrong, however, when he calls for former MP and financial advice blogger Garth Turner to be corrected with "the math."

I won't say that Garth's latest morsel of financial advice is "right" in all its details, never mind that he's right about the "goal of life" (the grand title of Garth's latest post) being related to achieving some level of financial wealth. But I can say that Dr Gordon is the mistaken party when he says that "variances and covariances and CAPM and stuff" will expose the errors of the former Parliamentarian.

In the comments to Gordon's post, Andy Harless takes a stab at "the math" by offering an example of how adding an asset that is less than fully correlated reduces the variance of a portfolio. In the world of "modern portfolio theory" or MPT, variance and risk are one and the same; a dubious assumption in my view but one I'll just run with for the purposes of this post. So far so so good. But then Dr Harless says, "Now free up a and b so that you can use leverage, i.e., take away the constraint that a+b=1." Sorry, but one cannot take away the constraint that the coefficients add up to 1 without taking away the equation. A weighted average means the coefficients must sum to 1 by definition.

When Garth suggests that people who have a $400K portfolio consisting solely of a house take out a home equity line of credit secured against the house for $200K and use the money for investing in a variety of other assets like financial instruments, he is indeed recommending diversification. The former portfolio contained a sole asset, the house (we'll call this asset X), and its weight coefficient was 100%, ie a = 1. In the new portfolio, a is still 1 ($400K) while the coefficient (say, "b") of the new assets (which we'll call asset Y) is 0.5 ($200K) and the coefficient (say, "c") of the HELOC (asset Z) is -0.5. The coefficient for the loan is negative because one is short the security. Thus a + b + c = 1 + 0.5 - 0.5 = 1.

Since variance is the square of standard deviation ("σ"), the variance of the portfolio is given by

where the CORR functions are the correlations between the subscripted terms (e.g. the first CORR term is the correlation between asset X and asset Y). Now suppose the standard deviation for asset X is 5% and 10% for asset Y, while the expected returns are 4% and 8% respectively. This would mean the house is expected to appreciate at just half the average annual rate of the new assets excluding the loan, but with just half of the volatility as well. Let's also assume the correlation between X and Y is 0.5. The standard deviation of asset Z would be zero if it's deemed a risk-free asset, which is an important concept in MPT. A risk-free asset returns the risk-free rate, which we will assume to be 3% for this example. The loan here may be reasonably defined as risk-free because it is secured by the home: the lender is accordingly guaranteed to be paid. As noted earlier, MPT defines risk as being variance, so the standard deviation of Z is zero.

Plugging these numbers in means the deviation for the new portfolio is 8.66%:

So Stephen Gordon is correct that total risk has been increased. A standard deviation of 8.66% is higher than 5%, which was the house alone. But can it be said conclusively that Garth Turner has "not got it right"? No, because the expected rate of return is also higher, and not just higher, but would be higher after adjusting for the increased risk. MPT uses what's called the Sharpe ratio to measure excess return per unit of risk. It subtracts the risk-free rate from the portfolio's expected return and then divides that by the portfolio's standard deviation. The portfolio's expected return is simply the weighted average of the expected return on its components, ie:

Another way to calculate this would be to take the dollar value of the expected return on the house (4% of $400K or $16K), add the additional $16K one would expect on the $200K investment (that returns 8% per annum), subtract the $6K one would have to pay on the $200K HELOC, and divide the resulting $26K by one's $400K net equity interest in the new portfolio. The Sharpe ratio for the new portfolio is 6.5% - 3% divided by 8.66% or 0.404. For the old portfolio of the house alone the Sharpe ratio was 4% - 3% divided by 5% or 0.2. In sum, while Garth's recommendation does increase risk, it more than compensates in higher expected return.

Now someone may object that the particular numbers I chose produced this result. Before one quibbles too much about that, I could make some observations about some of them such as noting as Garth does that the interest paid on the HELOC is tax deductible because it is considered money borrowed to invest and the investment is not in a tax-shelter. But the full answer is that the proposal is well-founded as a matter of theory and what I've provided is just an example.

MPT is primarily concerned with building mean-variance efficient portfolios. This means finding a portfolio mix on the "efficient frontier." Graphically, the efficient frontier (for a portfolio not including a risk-free asset) can be represented by the left boundary of a hyperbola sometimes called the "Markowitz bullet." One can think of the individual points along the frontier as portfolios of different risky assets in different proportions. The addition of a risk-free asset to the portfolio creates a new efficient frontier called the Capital Asset Line - or Capital Market Line (CML), which is the best possible Capital Asset Line - tangent to the hyperbola at the point where the Sharpe ratio is highest. Shorting the risk-free asset, or using leverage, is represented by the line above this point, which I have indicated in red:

Call the red part of the line the "Garth zone," if you like. All points on the CML have the maximum Sharpe ratio. It shows that just adding cash to a portfolio (represented by the part of the CML that is not red) or deleveraging can improve expected return for a given level of variance just as leverage can.

There are, of course, problems with this model like the fact it assumes that the variance of the assets has a neatly defined probability distribution. But almost all financial models have this problem, which can be loosely described as the "fat tails" problem. Garth Turner is in any case right in a more general sense in my view, since he appreciates the fact that the people who become truly wealthy in their own right through investments almost always use leverage to get there. Garth sums up, "The holy grail isn’t living in a place your friends covet. Then they’re not friends. The object is to posses enough wealth with liquidity to give you options. Freedom, choices." I think this is sound observation; a big house just ties one down, such that what the former Liberal (and former Conservative) politician proposes provides not just diversification benefits but liquidity benefits.