Monday, March 31, 2008

Obama the uniter

Obama's "arrival" on the national stage came with his speech at the 2004 Democratic National Convention. Amongst his memorable lines:

Even as we speak, there are those who are preparing to divide us, the spinmasters and negative-ad peddlers who embrace the politics of anything goes. Well, I say to them tonight: There's not a liberal America and a conservative America - there is the United States of America.


Call me cold, call me cynical, but this sort of thing doesn't really move me. According to the National Journal, Obama was the most liberal Senator in 2007. When you consider that there are 100 Senators, this 1st place showing is significant. John McCain, meanwhile, was, between 2002 and 2006 (he did not receive a rating in 2007 because he missed too many votes) the 45th, 44th, 49th, 45th, and 46th most conservative Senator. In 2004, only two Republicans were considered more liberal than McCain, Lincoln Chafee of Rhode Island and Olympia Snowe of Maine, and those two were ranked 1 and 2 in Human Events' list of the "Top 10 RiNOS [Republicans in Name Only]" in 2005.

Some asides:
- Mitt Romney was #8 on the Top 10 RiNOs list
- although DiNO would be the presumptive term for a Democrat on the right wing fringe of his or her party, some sources indicate that "Fox News liberal" or "Fox Democrat" is the preferred term, especially when the context is the extent of agreement with or deference to their conservative and/or Republican counterparts in media fora like TV talk shows.

Given that Chafee, who voted against the Iraq War authorization when Hillary Clinton voted for it, has subsequently left the party and even endorsed Obama, one can argue that Snowe is the only Republican Senator consistently to McCain's left, meaning that McCain is to the left of more than 95% of his party colleagues in the upper house. Although that might be overstating it, keep in mind that Chafee was the only Republican to vote against Samuel Alito's Supreme Court nomination (Alito was confirmed by a 58 to 42 vote), and McCain, in turn, has stated, disapprovingly, that Alito "wore his conservatism on his sleeve". Elsewhere, when asked if "Wouldn't it be great if you get a chance to name somebody like Roberts and Alito?" McCain replied "Well, certainly Roberts" (John Roberts, current Chief Justice of the US, was confirmed 78 to 22). Certainly McCain is not conservative on immigration (even libertarians would have reservations about his vote against an immigration bill amendment putting more weight on job skills than on family ties).

Should it be any surprise that both parties are nominating candidates on the left fringe of their respective parties (as evidenced by voting records, which I suggest is far more predictive than rhetoric)? Of course not: everyone knows that 2008 should be one of the best years ever for left leaning (on the US spectrum) candidates. But the Democrats are in serious danger of over-reaching here. McCain is already far more competitive in Michigan, Ohio, Pennsylvania, New Jersey, and Florida than Democrats should be comfortable with.

If Obama's support should significantly change, I think it is more likely to go down than up. Not because of anything Obama does in 2008 or because of past ethical concerns, but because of stories that suggest Obama's more distant history is relatively out of step with the American mainstream. Obama gave a great speech re Jeremiah "a lot of his Jewish support will dry up quicker than a snowball in hell" Wright (photo above) but that doesn't change the fact Obama joined and remained with a church whose leader was most definitely on the fringe.

Who else might come out of Chicago to say that, since going national, Obama is using uniting rhetoric to cover an activist past (and inclination)? Charles Lipson identifies several possibilities. Of particular note is the observation that while Obama, bomber-turned-professor Bill Ayers, and leading Palestinian activist Rashid Khalidi served on the board of the Woods Fund, the Fund gave $40 000 to the Arab American Action Network. Obama's real attitudes with respect to the Middle East conflict may, indeed, become a major issue. Ali Hasan Abunimah, an advocate of the single state solution (in which Jews in the region would likely lose political power by virtue of becoming a minority) and a co-founder of the Electonic Intifada, writes:

... I met [Obama] about half a dozen times, often at Palestinian and Arab-American community events in Chicago including a May 1998 community fundraiser at which Edward Said was the keynote speaker. In 2000, when Obama unsuccessfully ran for Congress I heard him speak at a campaign fundraiser hosted by a University of Chicago professor. On that occasion and others Obama was forthright in his criticism of US policy ....
The last time I spoke to Obama ... [h]e responded warmly, and volunteered, "Hey, I'm sorry I haven't said more about Palestine right now, but we are in a tough primary race. I'm hoping when things calm down I can be more up front." He referred to my activism, including columns I was contributing to the Chicago Tribune critical of Israeli and US policy, "Keep up the good work!"

Abunimah's piece includes a photo of Obama talking with Chicago scholar and Palestinian activist Edward Saïd, a "good friend" and fellow traveller of Noam Chomsky.
Now just as Stephen Harper has a history of association with various "right wing" outfits, Obama's connections with leftist Chicago preachers and/or Palestinian activists may not preclude him from the highest office in the land, were it not for the fact that so many Obama advisors of 2008 have butted heads with the "Israel lobby".

Barack Obama's military adviser and national campaign co-chairman Merrill "Tony" McPeak, former US Air Force Chief of Staff, told the Oregonian that the "problem" is in "New York City. Miami. [where there is] a large vote in favor of Israel. And no politician wants to run against it." Robert Malley, another Obama foreign affairs advisor, has come under attack for what are claimed to be anti-Israel views. Same goes for advisors Zbigniew Brzezinski and Samantha "[Hillary] is a monster" Power. Ditto for Susan Rice and donor George "anti-Semitism is caused by Israel and the US" Soros.

Naturally all this makes many voters even more enthusiastic about Obama. And it might ultimately say more about the power of the "Israel lobby" than about Obama if the issue becomes a deal breaker for him. But the people who oppose Israel are not swing voters. According to Gallup, Americans sympathize with Israel over the Palestianians by more than a 3 to 1 margin. Even if Israel is indeed the primary problem causer over there, Obama will end up seriously offside with the US swing voters in the north-east if it should come out that everything besides his national campaign speeches (i.e. his pre-Senate, Chicago days and the background of his advisors) suggests he's with the Palestinians, or, more generally, America's victims.

When I first arrived in Ottawa six years ago my immediate supervisor was a speechwriter for Paul Martin. Martin was so scripted even his apparent asides were scripted! There was plenty of doubt within the Finance Department that Martin would have a sense of direction after he left our people, in particular our policy experts, in Finance to surround himself with his own yes-men in the PMO. I don't doubt that Obama is genuinely skilled at giving speeches. But I do have my doubts concerning how much campaign speeches say about a politician's real inclinations.

mind the gap

In New Jersey, a state that has not voted Republican since Reagan was in the White House, today Rasmussen polling reports that McCain leads Clinton by 3% and Obama by 1%.

But of particular note is that fact that, among men only, McCain would lead Clinton by 29%. Among women only, Clinton leads by 21%.

That's a full 50 point gender gap.

Friday, March 28, 2008

US trade and carbon policy

According to Businessweek, "the economic priesthood continues to devote enormous intellectual firepower to making the case for freer trade... In the battle of public-policy ideas, American economists do wield influence."

An example of this might be Greg Mankiw's NYT op-ed. Although Mankiw makes the best case for voting for McCain that I've seen yet, his point about taking Obama's and Clinton's opposition to trade with a grain of salt is well taken. After all, Obama has Austan Goolsbee working for him and even Clinton's "top economic advisor" (according to CNNMoney) has written "in the long run America will win more than it loses from an open global economy. What practical options do we have between simply assuming greater globalization will lift all boats, and resorting to self-defeating protectionism?"

I've initiated a "blogroll" in the bottom right area with Greg Mankiw's blog as the first entry. I admit that part of my appreciation for Mankiw follows from my discovery that he largely agrees with what I've been saying about carbon taxes. He does it better than I do, of course, when he talks about it as a Pigovian tax. I had the general idea when I talked about externalities but I didn't have the term. This is why it is generally more useful to listen to someone with an actual PhD in economics than to someone like me.

Perhaps the best article yet that I've seen on emissions policy is by the former president of Mexico, Ernesto Zedillo:

... a Kyoto-type framework ... is not feasible. The only approach that will ... relieve countries' apprehensions regarding sovereignty and free riding is one in which all countries agree to penalize their carbon emissions in such a way that, over time, an internationally harmonized carbon price prevails. Consequently, the negotiation's focus would not be on emissions quotas but on the harmonized carbon-price trajectory.

Of course, carbon taxes (on burning fossil fuels) would provide the easiest way for countries to comply with the system, and each country could then decide what to do with the tax revenue. Some might make their carbon tax revenue-neutral by reducing other taxes. ...

If you're worried about climate change but don't like carbon taxes, think about the messy or even impossible alternatives!

Monday, March 24, 2008

it ain't over til it's over

The Oba-maniacs calling for Clinton to quit should dial it down.

First of all, Rasmussen polling has Hillary leading Obama amongst Democats. Gallup has her up by a full 7 points. If it was presumptuous for Hillary to offer Obama the #2 position (veep) while he was running #1, it is even more presumptuous to call on Hillary to walk away with nothing when she is running #1.

Secondly, Rasmussen also has Hillary doing better against McCain than Obama amongst Americans in general. McCain is 7 points up on Hillary and 9 points up on Obama. CNN and Gallup polls also have Hillary doing better than Obama vs McCain. You additionally have to consider the Electoral College here. Remember how Al Gore won the popular vote but lost the 2000 election to GWB? The distribution of Obama's support is more problematic for Dems than Clinton's.

PENNSYLVANIA GOV. RENDELL [on Tim Russert's Meet the Press]: ... we decide the presidency not by a popular vote, we decide it by the electoral vote. And the traditional role of the superdelegates is to determine who's going to be our strongest candidate. Tim, you and I have been doing this for a long time, as Tom has, and we know the big four in any presidential election recently are Pennsylvania, Ohio, Florida and Michigan. ... Look, it's great that Barack Obama is doing wonderfully well in Wyoming and Utah and, and places like that, but there's no chance we're going to carry those states. ... We've got to win three of the big four [and] Hillary Clinton's the strongest candidate to do that.


Rasmussen currently has McCain leading in all four, albeit by a statistically insignificant margin in Pennsylvania and Michigan.

To really make the point here, I could cite the Clinton campaign's statistics, but I would instead ask you to check this out. If the source's methodology is sound, as of late last week, Clinton is running AHEAD of John McCain on the College 294 to 231. Barack Obama is running BEHIND John McCain 238 to 288. These are not small numbers. In Pennsylvania, SurveyUSA has McCain leading Obama 47% to 42% while trailing Clinton 47% to 46%. Earlier this month Rasmussen said "In New Jersey, Hillary Clinton holds a double-digit advantage over John McCain... However, if Barack Obama is the Democratic nominee, the race in New Jersey will begin as a toss-up." On March 20 SurveyUSA released a poll showing Obama merely TIED with McCain in Massachusetts of all places. Rasmussen essentially agrees that with Obama as the nominee, Massachusetts could come into play for McCain ("Massachusetts: Clinton Leads McCain by 19, Obama Leads by 7"). 7 points would probably still be too much, but McCain could nominate Romney as his running mate. SurveyUSA's March 19 Ohio poll has Clinton over McCain 50% to 44% and McCain over Obama 50% to 43%. As Michael Barone notes:

In southeast Ohio, settled originally by Virginians and still Southern-accented today, [in the March 4 primary] Clinton carried all-white counties with 70% to 80% of the vote—more than she was carrying nearly all-white counties in central Texas. That raises doubts that Obama could run well in these counties, which provided critical votes in Bill Clinton's wins in Ohio in the 1990s and Jimmy Carter's narrow win there in 1976.

I don't doubt that Obama does better in the (non-Florida) South (today Rasmussen's polling said Obama would shrink a 16 point McCain lead over Clinton in North Carolina to 9 points over Obama), but a closer loss is still a loss. The African American voters who are breaking 90%+ for Obama are not the swing voters who will decide the general election.

Thirdly, why do the superdelegates get a vote if they are supposed to simply cast for whoever has more elected delegates? Presumably these superdelegates exist because they bring something of value to the table. If so, they should use that something. As of March 22, http://demconwatch.blogspot.com/ has it at a perfect tie, 1688 delegates each, when Michigan and Florida are included. While the February votes might have been a valid expression of sentiment when they were cast, they lose their authority as an expression of the popular will as they age. It is more than 200 days between between Super Tuesday and the Convention. If I were an undeclared superdelegate, I would continue to keep my power dry.

Obama could potentially be "swiftboated". Hillary cannot; she's simply been in the public eye for too long. Today's Charlotte Observer calls North Carolina "unexpectedly tight": the most recent poll in NC has Obama leading Clinton by a single percentage point. Older polls have Hillary within 4 to 8 points. A John Edwards endorsement would presumably vault Hillary into the lead in that state. If Obama should lose in NC on May 6 after getting blasted in Pennsylvania on April 22, expect to start hearing calls for Obama to quit!

Ontario should run a deficit

Given the very real economic reality of falling demand, the Ontario government would run a one time deficit (by adopting the tax reductions that the federal Finance Minister is calling for and I discussed here) while affirming its commitment to long term debt reduction.

What's happening is the opposite. The Ontario government will provide limited fiscal stimulus to the private sector. Meanwhile, the Toronto Star reports that "[t]he Liberals have also introduced legislation that allows part of the annual surplus to be spent ... rather than applying all of it to reducing the debt." This legislation suggests that, going forward, the Ontario Liberals will provide more stimulus when demand is high and tax revenues are flowing in, but less stimulus when demand is low and tax revenues are limited.

Part of the reason why Alberta politics are so frustrating is that many voters seem to be more concerned with "flows" than "stocks". As defined by the infallible Wikipedia, "stock refers to the value of an asset at a balance date (or point in time), while a flow refers to the total value of transactions (sales or purchases, incomes or expenditures) during an accounting period". So long as the "flow" is above the red line, all is presumed well in the land of the Wild Rose. On the "stock" front, however, the value of Alberta's assets is an embarrassment.

As I noted in an earlier post by quoting Wikipedia:


"Crowding out" is most serious when an economy is already at potential output or full employment. Then the government's expansionary fiscal policy encourages increased prices... At potential output, businesses are in no need of markets, so that there is no room for an accelerator effect. More directly, if the economy stays at full employment gross domestic product, any increase in government purchases shifts resources away the private sector.

This is Alberta spending in recent years. It gets worse, however, in that the spending also comes at the opportunity cost of contributing to our net asset position, which would allow us to run a deficit when economic growth is well below potential.

One can actually plausibly argue that the Klein cuts of the mid-90s were economically unwise. Why? Because if Klein had invested in, say, a high speed rail line between Edmonton and Calgary 10 - 15 years ago, we would have paid significantly lower prices then than now. As it was, the accelerated debt repayment of the early Klein years ended up removing the political discipline to restrain spending at the worst possible time. If voters disciplined non-savers like they are inclined to discipline deficit spenders, the 21st century would have been a different story for this province.

At issue is not the size of government per se, but expected return on taxpayer dollars. It is the generally low expected return that argues for smaller government in general. A government could responsibly go into deficit to fund an investment which generates a greater return than its cost of capital. Corporations borrow all the time and the issue for shareholders is whether the borrowing is being used to fund projects that have a "positive net present value" or NPV, not whether they borrow. In my campaign literature during February, I noted that Alberta spends almost 40% more per person than Quebec but then immediately also noted that Quebec has $7 a day child care.

Sunday, March 23, 2008

Jack Layton: odd man out

Dear voter:

Do you take anti-corporate rhetoric straight up and strident, undiluted by nuance, and with a chaser of 200 proof anti-Americanism? Is federal NDP leader Jack Layton too reserved in taking the battle to Harper for your taste?

Let me introduce federal Green leader Elizabeth May!

Compare this video of Elizabeth May on North American integration to Jack Layton.

From another clip I found of Elizabeth May:

Stephen Harper comes from a culture ... that Maude Barlow has documented meticuously in Too Close for Comfort. Read Too Close for Comfort and [you won't be able to] sleep at night.... the Alliance Conservative Republican Party of Canada is a horse of another colour...

The fact that Stephane Dion and Elizabeth "read Barlow for the truth" May are cutting deals says a lot about their, shall we say, ideological flexibility. Dion apparently has no reservations about a rapprochement with someone whose left wing rhetoric is so over the top in its belligerence it appears that even Jack Layton would be uncomfortable with it. May, in turn, is apparently more interested in working with a party that could form the government than "the conscience of Parliament" despite the fact that the SPP was a Liberal party initiative! On CBC Radio last August former Liberal Finance Minister, Foreign Affairs Minister, and Deputy Prime Minister John Manley observed that "[t]he Canadian left is very closely in sync with the American right on trade issues, which is to hunker down and keep everyone else out, and ultimately that will impoverish us all." Manley later showed more passion that perhaps I've ever seen him show when he slapped down Gordon Laxer (who serves the Albertans who pay his U of A salary by calling for a new NEP) observing:

Sovereignty is something that you have to exercise in a mature fashion. ... We compromised our sovereignty when we signed the Kyoto Accord, the Geneva Convention, the Vienna Convention. You want a model of sovereignty? The most sovereign nation on the earth today in my opinion is North Korea. They don't do what anybody tells them to do. Their people may be starving, they may be outcasts in the international community, but by God they're sovereign!

Friday, March 21, 2008

Son of Godzilla


Thursday, March 20, 2008

Flaherty vs Duncan

As someone who has been trying to raise some public awareness of corporate taxation, I obviously cannot agree with those who think that the federal Finance Minister should be raising this issue with his Ontario counterpart behind closed doors.

Flaherty's position, in a context of his own choosing and in writing, is available here.

This stuff isn't coming from Flaherty's own insight. He's getting it from Finance Dept memos and the key point to note here is that the Ontario government should be getting it from their own civil servants (although the fact that Ontario Finance Minister Dwight Duncan could be so bold as to state that Flaherty is "absolutely wrong" and declare that "[t]he old mantra that tax cuts create jobs doesn't [work]" does create some doubt about what, if anything, Finance Ontario is advising). It follows that it is not the Ontario government that needs to be educated but the voters of Ontario.

Now before anyone objects at how arrogant that sounds, let me be the first to admit my own ignorance of a key point. I've been critical of the federal Tories' 2% GST cut when they could have instead cut taxes on business and investment more. But my criticism there was relatively misplaced given that what the Ontario Liberals are doing is far more egregious. I now understand that Ontario's 8% PST is not, in fact, a value added tax. It applies to business inputs such that even the Toronto Star concedes that 40% of Ontario's retail sales tax revenue comes from business. It follows that Ontario's corporate rate alone does not tell anything like the whole story in terms of production costs and disincentives to investment. The Atlantic provinces (other than PEI) moved to a VAT in 1997 and a C.D. Howe study showed that in the following years annual investment in machinery and equipment there rose 12% above historic trend levels. Finance Canada says that "Harmonizing with the GST is the single most important action that these [harmonization resistant provinces] could take to improve their provincial and Canada’s overall tax competitiveness." Who's standing in the way of this? Dalton McGuinty and Dwight Duncan (although, in fairness, Ed "raise royalties" Stelmach isn't exactly welcoming business either).

Duncan hopes federal Finance Minister Jim Flaherty will aid Ontario by matching the province's $1.15 billion Next Generation Jobs Fund to keep and create manufacturing jobs here.
Despite the federal Conservatives' ideological aversion to what is often derided as "corporate welfare," Duncan says governments have to work with industry.
"My advice would be, "Pony up on this," [says Duncan].
- Toronto Star

This public "pony up" advice comes to you from a finance minister who elsewhere insists that a finance minister should evidently only advise another level of government in private.

Tuesday, March 18, 2008

Elizabeth May

Some interesting bits from the Macleans write-up include her consulting psychics to determine weather conditions, her use of crystals and visualization ("I used to put Premier Vander Zalm in a love light"), and her comment "I represented all the poisoned innocents of the world".

More good sense from David Chernushenko:
May's constant criticism of Harper is "a blind spot," says Chernushenko, one that's problematic for the party in Alberta where polls show Greens running second to the Conservatives. "When you demonize Harper you demonize everyone who voted for him. But really, in what way is Harper more evil than the Liberals, who promised they'd do something on the environment and climate change for 12 years and didn't, than someone who says, 'I don't believe the science and it's not worth doing' and then says 'I kind of believe the science and we're going to do something'?

One has to keep in mind here that May combines her antagonism for Harper with praise for Dion.

Thomas Goodman, a Winnipeg lawyer who supported May's leadership bid, left the party in November after he and May disagreed over direction. He recommended a moderate course that excluded extremists whom he found "dangerous"; she endorsed a big-tent approach. May consulted him over a press release advocating that every Canadian worker should be given four weeks' paid holiday; it said that currently, Canadian workers were being treated like serfs in the Middle Ages. "I wasn't sure it was constitutional, in that paid holidays are provincially regulated," Goodman says. He also found the language inappropriate. "To call workers of Canada serfs suggests employers are feudal lords." When he told May so, he says he received flippant reply: "I think Elizabeth's a good person, a sharp person, a wonderful orator, but she's politically naive."

If Chernushenko were Green party leader right now, I'd be seriously interested in joining the federal Green Party. But that didn't happen and apparently won't happen. "In July, Chernushenko announced he was leaving, frustrated his talents weren't being used fully. ... Chernushenko says he tried to work with May but found it difficult."

Monday, March 17, 2008

good news and bad for province

First, the good: Jack Mintz is chair of the Financial Investment and Planning Advisory Commission. Mintz told the Calgary Herald on Jan 21 that the Alberta government "needs much more fiscal discipline" and "[t]he most important message that will come out of our report will be why Albertans should save."

The Herald goes on to note that
A growing chorus of business leaders, policy experts and politicians are calling on the Alberta government to curb spending increases and pursue a more aggressive savings plan.
Resource dollars paid to the province are projected to drop nearly in half by 2009-2010 from the peak in 2005-2006. While the government's total savings are nearly $40 billion -- including about $16 billion in the Heritage Fund -- resource revenues have totalled an eye-popping $106 billion in the past 20 years.
During the past five years, provincial spending has ballooned more than 60 per cent, topping a projected $33 billion this year....
the Alberta government missed its budget spending targets by $9 billion over the past decade, while only 8.6% of non-renewable resource revenue from 1997 until 2005 was directed into the Heritage Fund.
"This is the biggest policy issue in front of the government," argued Roger Gibbins, president of the Canada West Foundation. "Of all the things we may be lacking a clear sense of direction in the province, this is [number] one" ....
The Calgary Chamber of Commerce calculates that had 30% of resource revenues been deposited annually into the Heritage Fund as was the case when it was created in 1976, it would now be worth $128 billion

The bad: There is no reason to believe the Stelmach government is inclined to listen. Lyle Oberg, who as Finance Minister appointed the Mintz panel last year, told the Herald that, "Saving just simply for saving's sake is probably wrong." Last week, Mintz noted the PC campaign platform wasn't grounded in much fiscal "reality". The Mintz report will also likely get buried unless the media talks it up. Going door to door in February it seemed to me that there was no shortage of people who were aware that the Royalty Review Panel called for higher royalties. If the Mintz report calls for more saving will it get the same penetration? Saturday's Herald said that Mintz' committee delivered its report "months ago" and the P"C"s have still not responded to it.

We're going to hit a fiscal wall here in the next couple of years.... They haven't had to prioritize in recent years; they've said yes to everything.
- Scott Hennig, Alberta director of the Canadian Taxpayers Federation

exchange on trade at G&M

Michael Hart responds to typical trade questions in a Globe and Mail Q&A.

Among his notable responses is a Lester B. Pearson quote:

The picture of weak and timid Canadian negotiators being pushed around and browbeaten by American representatives into settlements that were 'sell-outs' is a false and distorted one. It is often painted, however, by Canadians who think that a sure way to get applause and support at home is to exploit our anxieties and exaggerate our suspicions over U.S. power and politics.

Cramer calls it


Friday, March 14, 2008

federal Tories join Stelmach in opposing market solutions

I don't think I'd ever join the "Blogging Tories", and not just because I do not want to be put in the position of defending the spending, the shift in taxation from consumption (to income or investment), or the anti-democratic practices like the fact Rob Anders was acclaimed in Calgary West. Given that the Tory nomination process in a Calgary riding determines the MP, the absence of a competitive nomination effectively means the absence of an election. No meaningful election = no meaningful democracy. But perhaps Anders was acclaimed because no one else is truly interested in becoming a MP. I mean it's possible. It's also possible that I'm a Chinese jet pilot! Nomination shenigans are not restricted to Calgary West, either. Just ask my fellow Edmonton area Wildrose Alliance candidate John Baloun about his bid for a federal Conservative nomination. That said, the federal Tories can create a partial excuse for turning their backs on many of the old Reform party's policies by arguing that the Reform party could have never formed the national government. Stelmach's Tories have no such excuse; they could be significantly more fiscally conservative and democratically accountable without losing power.

But I digress. At issue today is the spectacle of a supposedly "free market" party preferring carbon emission mitigation via regulation instead of via market mechanisms. A letter sent to BC Finance Minister Carole Taylor signed by 70 academic economists from UBC, Simon Fraser, and UNBC, noted that

A carbon tax is superior to regulatory mandates because it allows both ordinary citizens and firms to adjust in the way that is best for them. It will also provide incentives for people to innovate, finding more environmentally friendly ways to produce and to live. In contrast, regulatory mandates force a “one size fits all” approach, are likely more costly to administer, and will always be one step behind in terms of the environmental technologies being applied.

Meanwhile, a US Congressional Budget Office study notes that

available research suggests that in the near term, the net benefits (benefits minus costs) of a [carbon] tax could be roughly five times greater than the net benefits of an inflexible cap.
...
The benefit of emitting one less ton of CO2 in a given year is roughly constant, whereas the cost of emitting one less ton of CO2 each year rises with each ton reduced. The reason for rising marginal costs is that companies that have to comply with an emission-reduction policy will make the cheapest cuts first and progressively more expensive cuts thereafter.

As I noted in another post, industry itself has called for a carbon tax (instead of regulation alone).

As environmental policy blogger Dave Sawyer notes:

... So, carbon tax with recycling is economically efficient, results in real reductions and can be politically acceptable. So, why are the provinces going it alone? Well cause the federal logic is priceless. But don’t let me sway you, let’s let minister Baird speak,

“We have a different focus, our approach is on industrial regulation”

You can’t script this stuff. We have a left leaning province implementing a carbon tax shift, a perceived left leaning organization, the David Suzuki Foundation, supporting a national carbon tax shift and a conservative government preferring regulations. Only in Canada, Eh.

Hillary vs Obama


A telling incident here was a debate in January where Hillary was asked about her vote for the Iraq war. If you're a Hillary supporter, her answer was that public policy is not as black as white as the hopers would like it to be. As someone who has worked inside the machinery of government and seen how complex issues like income trust taxation are demagogued in the public media debate, it's an answer I can appreciate. But there was no getting away from the fact that Obama supporters would have seen her response as lawyerly.

What gets me is that Hillary was not self-conscious enough to realize that to speak to Obama leaners she needed to drop her usual response and just state, clearly and without qualification, that she made a mistake and she regrets her decision. It's true that Hillary knows more than Obama. But I have to question her wisdom when she reinforces the popular stereotype of herself.

But all of this sort of analysis should be soundly trumped by whoever is going to be better at policy. The press is interested in what sells, and as a general rule policy doesn't sell. What sells is scandal, hence "NAFTA-gate". "NAFTA-gate" is of real interest, however, because of what it says about who Obama has appointed to advise him. This so-called "-gate" follows from what Obama advisor Austan Goolsbee told the Canadian Consul General in Chicago. Who is Austan Goolsbee?

On Jan 24 at the New America Foundation in DC the 2008 campaign advisors discussed their visions for the US economy. Participants were

Austan Goolsbee (for Obama)
Robert P. Gwinn Professor of Economics, University of Chicago Graduate School of Business

Leo Hindery (for Edwards)
Managing Director, InterMedia Partners, L.P.

Kevin Hassett (for McCain)
Director of Economic Policy Studies and Resident Scholar, American Enterprise Institute

Gary Gensler (for Clinton)
Former Under Secretary of the Treasury for Domestic Finance
Former Assistant Secretary of the Treasury for Financial Markets

Notice who is working for whom here: Obama's got a tenured academic from one of America's most prestigious MBA programs, Edwards' has a hedge fund manager who likely shares with Edwards the attribute of being so filthy rich he can easily afford to pay higher taxes, McCain has a guy from what the charitable would call a think tank and the uncharitable would call a right wing astroturf organization, while Clinton has someone with a resume closest to my own (work in the Financial Markets group of the US equivalent to our Department of Finance), although when you consider that he made great gobs of money working for Goldman Sachs, you might suggest greater parallels with the extremely accomplished Mark Carney. In any case, this who's who is itself is quite revealing. Of these four, the academic is the least likely to politically savvy. And, indeed, let's look at what Goolsbee said:




I'm a University of Chicago economist and no one is ever going to be more in favor of open markets and free trade than an economist...


No less a conservative luminary than George Will saluted Goolsbee's "nuanced understanding" of traditional Democratic issues like globalization and income inequality and concluded that he "seems to be the sort of fellow--amiable, empirical, and reasonable--you would want at the elbow of a Democratic president, if such there must be."

Now is it any surprise that Goolsbee is not going to be inclined to tell the Canadians that if his man becomes President free trade will be threatened? If Obama was seriously opposed to NAFTA, he would have never hired someone like Goolsbee in the first place. And that's the real story here.

True, Goolsbee was not as clearly free trade as McCain's man. But of note is that it was Hillary's man, Gensler, who tried to insist on "smart trade" (to which McCain's man responded, rightly, that "you need to be very very careful allowing thoughts like smart trade to leak in, because there's so many politically important interests that are opposed to free trade").

But there's more: Goolsbee shows a remarkable even-handedness when he acknowledges the work of Lawrence Lindsey and Martin Feldstein with respect to progressive taxation. In a Slate column, Goolsbee says he is a "free market type" and even goes on to argue that the Canadian health care model should not be applied in the USA! Obama has two other economic advisors, David Cutler and Jeffrey Liebman, both of whom are Harvard academics.

This has led to some Obama opposition from the left. The Nation says "Obama's disappointing foreclosure plan stems from the centrist politics of his three chief economic advisers" and a variety of lefty pundits have taken umbrage at the fact Obama's campaign has butted heads with their favourite economist, Paul Krugman ("All my criticisms of Obama have been from a progressive direction" - Krugman on Feb 12).

The bottom line? Clinton may be more knowledgeable about policy issues herself but Obama's advisors are superior. One of Clinton advisor Gensler's claims to fame is advisor to Senator Paul Sarbanes, and it is now broadly recognized that the Sarbanes - Oxley Act is a major reason why London is eclipsing New York as the world's financial centre (in fairness, McCain's man Kevin Hassett doesn't look good either after having co-authored Dow 36000). Furthermore, as someone with some exposure to all three of Treasury / Finance Departments, investing banking / Bay St, and academics, it's my opinion that the academics are the least likely to spin.

Thursday, March 13, 2008

changing the topic

No, I haven't run out of material for roasting Ed Stelmach, even when posting five times a day. Don't you worry your pretty head about that, dear reader! Have some respect for the relability of my source! Whenever I am in dire need of making a snide retort, Ed will be there.

I'm changing the topic simply because I am too conscious of the fact that you haven't been blessed with perspicacity like I have with respect to the myriad other issues of the day. It thus behooves me to throw my many pearls of wisdom and wit on other matters before you, for you to trample underfoot. You don't have to thank me.


A man with genius is unendurable if he does not also possess at least two other things: gratitude and cleanliness.
- Friedrich Nietzsche, Beyond Good and Evil

And so it is that we turn to a weighty discussion of the various tribulations facing "client number 9". Now they say it takes a genius to recognize a genius, so my service for you on this, the most portentous issue facing humanity, is to simply to refer you to the Guns N Roses' observation that
Some men you just can't reach...
So, you get what we had here last week,
which is the way he wants it!
Well, he gets it!
n' I don't like it any more than you men

Nietzsche might have something to say here as well, however: "The degree and kind of a man’s sexuality reaches up into the topmost summit of his spirit."

Some more gratuitious quotes:
The measure of a man's real character is what he would do if he knew he would never be found out.
- Thomas Babington, Lord Macaulay
A man's reaction to his appetites and impulses when they are roused gives the measure of that man's character. In these reactions are revealed the man's power to govern or his forced servility to yield.
- David Oman McKay
He who reigns within himself and rules his passions, desires, and fears is more than a king.
- John Milton
Discipline is the price of freedom.
- Elton Trueblood
Men should be what they seem.
- William Shakespeare

you've heard this one before

Today's Edmonton Journal:

There's nothing conservative about these Conservatives. They spend more than any other provincial government -- in Canadian history. ... They have yet to find a problem that can't be fixed by throwing money at it.

a carbon tax would give you a choice

Wednesday's Edmonton Journal says that "[i]ndustry estimates of the cost vary from $60 to $100 per tonne to capture, transport and store the carbon [dioxide]." Meanwhile, Stelmach says he will cap industry's abatement costs at $15 a tonne. While Albertans ultimately pay for costs imposed on Alberta industry just as they pay through personal income taxes, the fact that the Alberta government will have to pay the difference between $15 and the actual cost of mitigation (a cost which, as I argued below, could be lowered like that for any other tradable good if the premier were not opposed to free trade) out of its general revenues should make more immediately obvious the link between Stelmach's spending plans and the fact you will have to foot the bill.

Do you think it is fair that a person who always takes public transit or walks / cycles and uses low energy appliances should pay as much for CO2 mitigation through taxes as a person who drives a gigantic gas guzzler and has no interest in conservation? Economists generally think of "efficiency" instead of "fairness" since "what is fair" is typicaly a value issue that is often not settled by evidence and argument. But it isn't "efficient" either, because, quite aside from fairness, apart from changing the incentives for end consumption you are not addressing the fundamental driver of the whole carbon emissions problem (to the extent that it is really is a problem for Albertans).

At least with a carbon tax you could avoid it by changing your lifestyle.

analyst comments on future "Big Oil" profits

Christine Juneau, COO of John S. Herold, and Martin Lovegrove, vice-chairman of Britain’s Standard Chartered Bank, sent a joint letter to clients this week saying "Access to opportunities has continued to become more restricted and securing approval for project and deal go-aheads has lengthened."

Rising costs are required to squeeze crude from unconventional sources like oil sands. Governments around the world have increased their share of oil revenue to 54% from 44%.

Ms. Juneau and Mr. Lovegrove said the industry had better margins at $30 (U.S.) per barrel oil than it did at the end of 2007 with a price of $96 (U.S.) per barrel.

Tories vs emissions trading

From Monday's Edmonton Journal: "Stelmach has long opposed a national trading system for greenhouse-gas credits, even though most provinces, American states and experts agree it's the way to go. " Says Ed: "I'm not a fan of interregional wealth transfer, and I'm going to oppose it." The CBC says the premier added, "We're not a province that's going to be buying credits somewhere else" and "My job, my responsibility is to stand up for Albertans, and I will."

Let's make something clear right off: a market is not a "wealth transfer" in Ed's sense of making a party worse off. Two parties engage in a market transaction because they both believe they will be better off. The irony here is thick because the real "wealth transfer" in Ed's use of the term is our national equalization program, and Ed has not only not been standing, he's been any or all of sitting, silent, or sleeping with respect to the federal government continuing to move capital from where there is a high expectation of return to where there is a low expectation of return. One might also point to the CPP, which Alberta, absent its own pension plan, effectively subsidizes by virtue of our demographics.

If Ed doesn't want to "buy credits somewhere else" because he thinks the credits do not represent anything of value to Alberta (e.g. are like a Kyoto "Assigned Amount Unit") then fine. But it is totally inconsistent to suggest that the real mitigation of CO2 emissions anywhere in the world has some value to Alberta and then assert that credits associated with those real reductions are valueless.

One less tonne of CO2 emitted on the other side of the world makes as much difference, good or bad, to Albertans as one less tonne emitted in Alberta. Why pay $25 to reduce a tonne here if one can pay $5 to reduce a tonne somewhere else?

The whole concept of comparative advantage seems to be lost on the premier. Stelmach's "logic" would argue that Alberta should grow its own bananas no matter what the cost because importing bananas into the province would constitute an "interregional wealth transfer".

It's true that on http://www.bdell.ca/ I poured cold water on the idea of a carbon emissions credit market. But that's because it won't work unless it's global or, at an absolute minimum, continental. The more localized the market, the lighter the caps would have to be lest nothing at all be accomplished because parties bound by the caps would relocate outside the market. Here we have Stelmach calling for more localization and unilateralism, not less!

These markets are far more effective when you have as many of them linked as possible and have as much liquidity as possible; it gives you better price discovery and also faster, more cost-effective reduction.
- Doug Russell of Natsource LLC, an Ottawa-based emission credit broker.


At the moment it looks like the premier is going to effectively force Alberta companies to divert investment from the projects where they enjoy a comparative advantage to projects where Alberta companies would be at a comparative disadvantage. It's pushing our capital base into the construction of greenhouses for "Alberta made" bananas.

Ed has managed to hit that public policy sweet spot where the policy is absurd regardless of what your position is with respect to the merits of CO2 mitigation. If you think CO2 mitigation is high priority, you have to shake your head at Ed's insistence on overpaying. If you think it is low priority, you have to shake your head at the fact Ed is paying anything at all.

As usual, industry recognizes the absurdity that our supposedly "conservative" governments do not. A carbon tax, paid by consumers, looks like genius in comparison and Tuesday's Calgary Herald has an article titled "Oilpatch urges fuel tax". It quotes Stephen Kaufmann, president of "carbon capture technology's leading proponent, the Integrated Carbon Dioxide Network". If commercial economics or cost are ignored, you "need to spend a huge amount of money to install the capture facilities," said Kaufman. The government seems not the least concerned about whether its climate change plans end up setting new records for budget busting cost relative to benefit, just so long as the boondoggle occurs close to home. According to the Edmonton Journal:

Carbon capture is the main driver of the Stelmach government's plan.... Industry players expect the federal and provincial governments will pony up around $2 billion to help set up a costly pipeline and sequestration system.


The Herald article notes that Enbridge president Pat Daniel estimates that the installation of the technology, collecting, transporting and disposing of waste carbon dioxide will cost $80 to $100 per tonne of emissions. This while credits in Europe, which are trading under more stringent caps than anything proposed by government around here, were trading last month for less than $30.

Perhaps it is part of Stelmach's shrewdness not to seem shrewd.
- Barry Cooper, U of C poli sci prof and Herald columnist

Wednesday, March 12, 2008

Cabinet appointments announced

I could spend more time here talking about the Cabinet appointments, but frankly I don't see the relevance. I'd rather critique a policy than a person. Would you prefer good government from someone who isn't from or of your town, gender, or ethnicity or bad government from someone who is? In any case, more than 60 000 Albertans voted for the Wildrose Alliance and more than 40 000 voted for the Greens and they have no representation at all in the Leg, never mind representation in the Cabinet. If Stelmach were really interested in listening to those 65 000 Wildrose voters, he would have made note of that party's call for a 12 member Cabinet. Instead he balloons his 18 member Cabinet in the opposite direction to 24, and that doesn't include the legion of new "Parliamentary Assistants". When the NDP is taking issue with how bloated the new cabinet is, as Brian Mason did today, you know the size of the bureaucracy is getting out of hand. Mason also objected to Stelmach loyalist Mel Knight's continuation as Energy Minister, which is equally remarkable given the fact the oil patch had been hoping Mel Knight would be shuffled for some time now. I say "hoping" and not "publically calling", because no oil executive with a brain is going make an enemy out of the Minister that he or she is hoping to positively influence.

Barry Munro, an analyst with the consulting firm Ernst and Young, said yesterday that ... [f]ailing to review the royalty proposal ... could lead to an outflow of capital from Alberta. "There continues to be this very, very impassioned call on the government to just simply fix some things that were just badly flawed within the logic of the royalty recommendations. He's got to get on with that, and he's got to get on with that right now because business-planning cycles require certainty or else people just quit spending. When faced with an uncertain framework, people just allocate capital elsewhere." Moreover, Stelmach's government needs to gain a better understanding of how the oil and gas industry works, Munro said, noting "there's a perception that there's a lack of understanding ... immediately flowing out of that is this lack of confidence."
- Calgary Sun, March 5

The Sun elsewhere notes that Peter Linder, a Calgary-based petroleum analyst and principal owner of DeltaOne Capital Partners Corp, believes that "the royalty regime weighs most heavily on junior companies... who, unlike large producers, are unable to focus on operations outside of Alberta to avoid paying higher royalties. "Those are the ones that are really suffering," he said." Linder also "said he doesn't think Knight will survive in the energy portfolio" and "said he expects Stelmach to appoint a minister 'who is much stronger and much more knowledgable' than Knight."

I suppose this is where I retract all my speculation about merging with the Liberals and suggest we merge with Brian Mason's NDP instead!

UPDATE:

Frank Oberle (Peace River) has been appointed "Caucus Whip" and Robin Campbell (West Yellowhead) as "Deputy Whip". Who needs to be whipped? Half the Cabinet alone would be more than enough to outvote the opposition!

Saturday, March 8, 2008

lessons learned: #2

2. The Reform analogy does not apply

While going door to door, for a while I tried introducing the Wildrose Alliance by saying "to oversimplify, we're like a Reform party for the province." I see now that that was an association that was pushed more explicitly by candidates like Rand Sisson in 2004 under the Alberta Alliance banner.

Looking at the election results I think it's clear that the Reform movement's popularity had far more to do with the pervasiveness of "western alienation" than with deep enthusiasm for either democratic reform or fiscal conservatism. The provincial P"C" party has violated both of the latter principles to a greater extent than Mulroney's PCs ever did. The provincial civil service and the Alberta PC party have been conflating for close to 40 years now, and although the provincial P"C"s are not currently running a deficit, that is simply not an appropriate metric for assessing fiscal conservatism. A person who makes $30K a year and temporarily goes into deficit to put $5K into a RRSP is more fiscally conservative than someone who makes $100K and spends all of it on consumption. Even that analogy is misleading because, generally speaking, a harder working or more talented individual will make more money, whereas for goverments, it is the hard work and talents of the private sector that creates the revenue which governments spend!

I've seen "More Alberta, less Ottawa" or "Free the West" signs. But I've never seen "More Calgary, less Edmonton" or "Free the South" anywhere in the province. Yet the rural south and urban Calgary are precisely where the Wildrose Alliance was received best. Why? Because Stelmach is perceived as the north - central candidate. The sense of regional alienation within the province is not great enough to propel the Wildrose Alliance anywhere in particular, however. It isn't something we've run on, except for our plank about providing stable, reliable, and unconditional municipal funding and allowing service delivery at the local and community level wherever possible.

Moving Ed Stelmach into the premier's office appears to have been very effective politics for the P"C's, because the people most opposed to Ed were in ridings where the P"C"s had historically been running up such big wins they could afford to give away votes by the barrelful. Stelmach then picked up votes in marginal Edmonton area ridings such that the P"C" seat count increased.

Nowhere could the opposition to Ed be very intense. Why? Because he's ultimately an Albertan. Stephane Dion is not like any guys I know around here, Ed Stelmach is.

For Stelmach to end up in serious trouble, he'd have to go on such a spreading spree and/or make moves so anti-democratic that he'd be widely perceived as "un-Albertan". Given the way the Alberta P"C"s have managed to brand themselves as the symbol of this province and its prosperity, such sins are going to have to be especially egregious to not be forgiven.

When asked about his chief rival, Broyce Jacobs, an MLA in [the Cardston - Taber - Warner] riding himself from 2001 to 2004, replied gruffly: 'I don't talk about the Wildrose Alliance. I talk about me and Alberta and the PC government that built this province.'

lessons learned: #1

Some reflections on the campaign in Edmonton Beverly - Clareview:

1. Don't bother campaigning

Cynical? Of course. But it's hard to ignore the fact that after distributing 5000 flyers, half of which were distributed on foot and a good proportion of those in an eye to eye meeting, putting up 250 signs, and having an extensive on-line presence, I got very close to the same result that the Wildrose Alliance candidate in neighbouring Highlands - Norwood got, and he was essentially a name on a ballot. One can't very well turn to the explanation that he had a resume and I didn't, given that my colleague was all of 20 years old! More to the point, I've reviewed the poll by poll results and there doesn't seem to be any rhyme or reason to where I did better and where I did worse. Although there does seem to be an explanation for the polls where I got less than 1% (these where generally polls in the north western area of the riding where I had neither door knocked nor distributed brochures), there is also no obvious explanation for why I did as well along 127 ave and Fort Road as I did, getting close to 10% at times. The only thing I can think of is that my cameo at the Transit Hotel amongst the drifters and down-and-outers somehow had a real impact in the nearby areas. Generally speaking, though, there were poll areas I had more of a campaign presence in than others and this did not seem to have made a consistently discernible difference.

Although it's possible that my vote count was simply too low to lend itself to meaningful analysis, consider the Liberal campaign in my riding. Dawit Isaac must have knocked on every door in the riding at least once and I've heard reports of twice. This includes apartments and condos since it was a condo door he knocked on when I opened it to first meet him. He for certain called every home in the riding and some homes 4 times, perhaps more. The RO called a meeting at his office mid-point where he distributed the revisions to the List of Electors following Election Alberta's canvassing of new areas early in the campaign, and the NDP and P"C"s where no shows. Just myself and Dawit Isaac's indefatigable campaign manager. This represented hundreds of names whose phone numbers would not have been available in the electronic version of the Electors List and so would not have been called by the Ray Martin or Tony Vandermeer campaigns. Dawit Isaac was actively raising money last year and obviously raised a lot, since he had a full size billboard on the Yellowhead highway at 66 st, had major advertising in local publications and in the LRT stations, and had multiple literature drops during the campaign. I once found a "Happy New Year" card from him, suggesting that he hit the riding with a mailout a month before the campaign. He got his volunteers together to have a cheer group at major intersection, something I never saw out of the NDP or P"C"s.

Yet for all that Dawit Isaac will not even get the $250 of his candidacy deposit back that he would have gotten had he received just 50% of the winner's vote count. Isaac got less than 2000 votes while Tony Vandermeer received more than 4100. There is simply no denying the fact that Isaac was by far the hardest working candidate in the riding, and although I'm sure all of the candidates were going full out in the last week, Isaac started laying the groundwork months and months ago. On election night TV Vandermeer said that he had reckoned it could have gone any of 3 ways. Clearly it couldn't really have, since he more than doubled Isaac. Vandermeer indicated that Stelmach must have gotten him at least 1000 votes, which suggests that Isaac's campaign was dead in the water the day the P"C's handed the reins to Steady Eddie. One of the great mysteries is why Dawit Isaac didn't run as an independent. He could hardly have done worse, and the Liberal Beverly - Clareview constituency association was largely built by the labours of him and his supporters anyway.

Which brings me back to my central thesis: what happens internally within the P"C" party, whether it be nominations for riding candidates or votes for party leader, are of far greater import to Alberta politics than general elections. Individual riding campaigns sink or swim with the provincial campaign.

Going forward, I could hardly blame any potential candidate, donor, or volunteer for saying that any time or money put into the Wildrose Alliance would offer a far lower return than trying to influence a P"C" nomination battle. It's a vicious circle, where no money, no volunteers, and few quality candidates breeds a poor election result which in turn breeds even less money and fewer people for next time. In hindsight it's now clear that the Alberta Alliance had been caught up in this downward spiral since 2004. If the Wildrose Alliance had doubled up on what the AA got in 2004, we'd start approaching that tipping point where people would sense the wind was changing and there'd be a rush of money and man hours into the party. But getting to that point is extremely difficult. At a minimum, we would need proportional representation so we get something more like a linear payoff (e.g. a series of 20% riding vote shares would produce more results than a series of 5% shares).

Thursday, March 6, 2008

merger with the Liberals? - the case against

The first and most obvious problem is Kevin Taft.

One telling moment was Taft's reference to Albertans' sense of alienation from Ottawa and how it behooves us to be, if I might paraphrase, "bigger than that." It wouldn't surprise me at all if this really motivated the Liberal base, because this is exactly the sort of character that Liberals pride themselves in having. But for anyone who does feel the slightest twinge of resentment towards Toronto and the rest of the Centre, they feel they are being lectured to about what they value.

If you want to win votes, you take Albertan values for what they are and then demonstrate to Albertans that the other parties will not, in fact, serve those values even though the popular assumption is that they will. Argue that my assumptions are mistaken, fine, but don't argue that my values are fundamentally misguided because that is not, at the end of the day, any argument at all: it's a value judgment.

Example: the NDP talk about taking "big $$$ out of politics". This ultimately does nothing for the working man, and not least because of the gigantic loopholes the NDP isn't talking about, like the fact they take transfers from the federal party and the federal party can go on taking big $$$ from big unions. The "Libertarian Party' could adopt a plank from the Wildrose Alliance and raise the basic personal exemption to $20K while immediately eliminating health care premiums. The resulting near grand in savings for a worker making just 21 grand a year is actually something substantial for the struggling working man.

The other problem is many of the candidates. At a forum I attended during the campaign, the Liberal candidate for Highlands - Norwood was a union activist who wanted to tangle with me over rent control and free trade. Clearly, guys like him need to shuffle on over to the NDP if Wildrosers were to ever merge with the Alberta Liberals. But shuffle he will do without any pushing if enough Liberals were to stand up and say any and all business bashing must henceforth cease, not because there is no sympathy for the Maude Barlow crowd but because there is already a home for the idealists called the NDP, and no opposition party is going to truly threaten to form a new government in this province if it appears fundamentally suspicious of markets and business.

There are a variety of platform issues that would be difficult to reconcile. But I do not think it is impossible if both sides agree that policy should be evidence-based and informed by scientific and/or professional research. If all concerned commonly recognize the primacy of reason, differences can be ironed out by establishing what is more rational. I think Liberals would come around to the idea that CO2 mitigation should be lower on the priority list when all the problems of a unilateral solution are examined and when its shown that even the Greens talk more about other environmental moves.

On the other hand, one has to wonder how flexible Alberta Liberals are, if they are still carrying their cards while the P"C"s slide left. If the P"C" movement on various issues hasn't brought any Liberals over, how many Liberals would come over if the Wildrose Alliance made some moves? It could be that they simply continue to resist the P"C" Machine, and are less than keen to have to admit to themselves that they've been co-opted into the Borg. However, this is not a grievance they'd have with the Wildrose Alliance. Also, the left - right spectrum has its limitations as an interpretative tool such that saying the P"C"s have moved towards the Liberals is as much an obscuring analysis as it is enlightening.

merger with the Liberals? - the case in favour

I have an Alberta Liberal brochure in front of me that says


... a tired PC government is spending more than ever before.... We would build the Heritage Fund to reduce our reliance on oil and gas revenues, and carefully manage future development to preserve a healthy and diverse natural environment.... Businesses can't find enough workers, and have trouble keeping the workers they do hire.... Government spending is at an all-time high, even as energy revenues are dropping - and little has been saved for our future.

Elsewhere, the Alberta Liberals indicate that they support fixed election dates and a variety of other reforms.

Unlike the NDP, Liberals at both the provincial and federal levels are not necessarily anti-business.

Many cornflake conservatives make something of a past-time out of mocking "latte liberals". According the Times of London, an Obama supporter is a typical "latte liberal":


These are the people for whom Starbucks, with its $5 cups of coffee and fancy bakeries, is not just a consumer choice but a lifestyle. They not only have the money. They share the values. They live by all those little quotes on the side of Starbucks cups about community service and global warming.


As someone who lived in Paris' cinquieme arrondissement for few months, nibbled on biscotti in Italian cafes, and smoked the sheesha in London's Cafe Cairo, I don't exactly see just what the problem is with being upscale, urban, and cosmopolitan.

Calgary executives and Edmonton grad students arguably have more in common with most Liberals lifestyle-wise than with Steady Eddie Stalemach. Regardless of who Paul Hinman is himself, the guys who prepped him and ran the spin on the Wildrose Alliance platform were a couple of young urban international professionals, unlike the ancient, out-of-ideas "brain"trust behind Stelmach.

In addition to a bit of raffinement, a merger with the Alberta Liberals could potentially give Wildrosers access to money, non-defunct constituency associations, and candidates who have gotten their name in the paper for something other than getting into an "altercation" at a gay pride parade. Everything we didn't get from the Alberta Alliance, in other words.

Professional economists are already on side with the Wildrose Alliance, and not with Ed "22% interest rates" Stelmach. A merger with the Liberals would bring the rest of the intellectuals on board in a new "Libertarian Party". Such a party could actually win.

Wednesday, March 5, 2008

comments re numbers below

Wildrose Alliance 2008 was very much a Calgary and "far away from Stelmach's home base" phenomenon.

Generally speaking, the party actually picked up bigger vote shares in urban Calgary than in the rural north, excepting the Peace Country, and even there, the 30% share in Central Peace was down from 40% in 2004. Whitecourt - St Anne is north-east and held it's own, but Link Byfield was a recognized name.

Edmonton area rural ridings (i.e. Leduc/Devon, Wetaskiwin, Ponoka, Athabasca/Redwater, Stony Plain and West Yellowhead) all posted lower vote shares than the vast majority of Calgary area urban ridings. All of those Edmonton rural ridings also posted lower vote shares relative to themselves in 2004, while many Calgary ridings picked up half again as much vote share as in 2004.

Urban areas outside Calgary, i.e. Red Deer, Medicine Hat, Lethbridge, and Edmonton, all saw notable drops. In Red Deer north and south combined, the Wildrose Alliance received just half of the votes the Alberta Alliance did in 2004. The drops in south Edmonton were even greater.

In the circumstances, perhaps my individual efforts actually held the line somewhat. The Alberta Alliance candidate who ran in my riding in 2004 moved one riding closer to the northeast edge, which should have been more promising given that the AA did better there in 04, but ended up with a lower vote share than I did in 2008.

The problem with trying to analyze the Edmonton results, however, is that they are so low (generally 3% or less) that movements are not really significantly significant. There is generally going to be a floor around 2% that even a fringe or paper candidate would get. When you look at the fact that Edmonton area rural areas slumped too, it's apparent that the the whole region was simply too close to where the premier is from for the votes to not go to the premier's party.

On the upside, congratulations should go to Chris Jukes of Calgary North West for most effective campaign. Party HQ was asking the rest of us candidates to take note of his tactics and they must obviously be effective since he tripled the Alberta Alliance result in his riding in 2004. Without perhaps considering everyone I should, I'll recognize Bob Babcock for most professionally conducted campaign. I had the privilege of meeting Bob in Calgary in early February and I'm pleased to see his good results match the impressive good first impression he makes.

Wildrose Alliance vote percentages

in brackets is change from the Alberta Alliance 2004 vote percentage

45.5 (+1.5) Cardston - Taber - Warner

29.3 (-11.0) Dunvegan - Central Peace
23.2 (+13.7) Little Bow
21.6 (-2.6) Whitecourt - St Anne
20.5 (+4.0) Olds - Didsbury - Three Hills
15.8 (+9.4) Airdrie - Chestermere
15.0 (+5.3) Foothills - Rocky View
13.1 (+4.3) Grande Prairie - Smoky
11.9 (+5.0) Highwood
11.8 (+3.9) Rocky Mountain House
10.9 (-9.1) Innisfail - Sylvan Lake
10.7 (+0.5) Peace River
10.5 (-4.4) Livingstone - Macleod
10.5 (-3.2) Drumheller - Stettler
10.2 (+1.5) Drayton Valley - Calmar
9.1 (+0.1) Strathmore - Brooks
7.6 (-0.1) Cypress - Medicine Hat
7.2 (-1.6) Leduc - Beaumont - Devon
7.0 (-3.0) Wetaskiwin - Camrose
6.5 (-11.5) Lacombe - Ponoka
5.9 (-9.3) Stony Plain
4.7 (-5.2) Athabasca - Redwater
4.2 (-4.0) West Yellowhead

14.9 (+10.5) Calgary - North West
13.1 (+5.5) Calgary - West
12.5 (+6.2) Calgary - MacKay
11.8 (+7.6) Calgary - Lougheed
10.7 (+0.1) Calgary - Montrose
10.6 (+4.4) Calgary - Hays
10.6 (+4.8) Calgary - Shaw
10.3 (-0.5) Calgary - Nose Hill
9.6 (+1.6) Calgary - Bow
9.6 (+3.0) Calgary - Fish Creek
8.6 (+2.4) Calgary - North Hill
8.6 (+1.8) Calgary - Fort
8.6 (-1.3) Calgary - Cross
8.1 (+0.8) Calgary - East
8.1 (+3.5) Calgary - Glenmore
7.7 (+3.1) Calgary - Foothills
7.1 (+1.7) Calgary - Varsity
6.6 (+3.0) Calgary - Elbow
6.5 (+2.1) Calgary - Mountain View
5.6 (-2.3) Calgary - McCall
5.5 (+2.4) Calgary - Currie
5.2 (-9.6) Calgary - Egmont

7.7 (-11.3) Red Deer - North
7.7 (-4.2) Red Deer - South

7.1 (-3.0) Medicine Hat

7.5 (-0.8) Lethbridge - West
6.2 (-5.4) Lethbridge - East

4.3 (-5.6) Edmonton - Ellerslie
3.1 (-0.8) Edmonton - Rutherford
3.0 (-5.0) Edmonton - Millwoods
2.7 (-1.7) Edmonton - Beverly - Clareview
2.7 (-1.4) Edmonton - Meadowlark
2.6 (-0.6) Edmonton - Highlands - Norwood
2.5 (-2.4) Edmonton - Manning
2.4 (+0.1) Edmonton - Glenora
2.2 (+0.2) Edmonton - Riverview
1.8 (-1.3) Edmonton - McClung
1.8 (-0.8) Edmonton - Centre

Tuesday, March 4, 2008

the high water mark

Debate night, Thursday Feb 21, looks like it will stand as the high water mark for some time to come.

Participating in a leaders' debate by virtue of what was accomplished in 2004, Paul Hinman spoke about what I'd been waiting to hear for so long: free markets, free people, efficiency, innovation. Hinman was certainly not perfect and I thought he stumbled on the childcare issue, but here was someone who was actually campaigning for free markets and free people and not just campaigning on populism until he became premier at which time public policy experts in the civil service would tell him that populist policies won't create efficiency, stimulate innovation, or keep growing the economy well after the royalties are gone.

[Faron Ellis, a political science professor at Lethbridge College] said Hinman won a lot of respect when he locked horns with the leaders of the Tories, Liberals and the NDP in the recent televised leaders debate. "He was spectacular," said Ellis.


I know you have an image of Alberta as an island of fiscal conservatism, but it's just not true. It's been taken over by red Tories who are spending like mad. In that context, the interesting performance of [debate] night was by Paul Hinman, who spoke directly to the fiscal conservatives and said 'Your [PC] party has abandoned you.' [Hinman] did very, very well
- Paul McLaughlin, political analyst for CBC News



With only the P"C"s, Liberals, and NDP winning seats in this election, there will be only 3 participants in the next TV debate. Given the strength of Stelmach's mandate, it is very difficult to see how any significant resistance to Ed's agenda (or, more precisely, lack thereof) could be mounted within the P"C" party. Unfortunately, it is also very difficult to see where the Wildrose Alliance goes from here.

When Hinman was asked what was in his future politically, he answered: "Probably not much." ... Ellis ... said before the results came in that if Hinman were to lose his seat, the party was dead. "That would clearly be the immediate and irrevocable demise of the Wildrose Alliance."

I am not quite so ready to just give up. If we get another yet another boondoggle budget, and no reform of the P"C" nomenklatura culture, maybe Albertans will say enough is enough. But we've had several in a row now so what's one more? For today it is rather more pleasant to think of that not-so-long-ago moment where the voice of fiscal conservatism, of democratic reform, of entrepreneurialsm, innovation and "can do" self starting, spoke out and several people listened. I'm glad to have been a part of that team.

Monday, March 3, 2008

grim outcome

in Cardston - Taber:
PC 4367
WA 4328

There will be a recount, I expect, but 39 votes is very likely to be too much to make up.

I wish I could send you my 289 votes, boss!

Looks like I should have never campaigned here at all, and instead driven down to Cardston to campaign for Hinman for a couple weeks.

Vandermeer wins Edmonton Beverly - Clareview

With all polls reporting:
PC 4164
NDP 3846
Lib 1995
WA 289
Green 183
SoCred 67

38.2% of those who could vote did

Well, I guess the upside for me is although I only got about half of what the Alberta Alliance got here in 2004, I spent only about a fifth.

I called Vandermeer's office to congratulate him, but didn't ask to speak to him directly since I was, in fairness, a fringe candidate.

It's unbelievable to me. They can be such screw-ups, you know — in terms of housing, everything else around — and be rewarded for more.
- Ray Martin

Sunday, March 2, 2008

Election Day!



Election day polls will be opening soon. In terms of predictions for Edmonton area Wildrose Alliance candidates, all I can say is that Edmonton Rutherford should be a riding of particular note. John Baloun is a good politician and hopefully he'll get some good numbers for us there.

While walking down the street one day a powerful politician is tragically hit by a truck and dies.

His soul arrives in heaven and is met by St. Peter at the entrance.

'Welcome to heaven,' says St. Peter. 'Before you settle in, it seems there is a problem. We seldom see a high official around these parts, you see, so we're not sure what to do with you.'

'No problem, just let me in,' says the man.

'Well, I'd like to, but I have orders from higher up. What we'll do is have you spend one day in hell and one in heaven. Then you can choose where to spend eternity.'

'Really, I've made up my mind. I want to be in heaven,' says the politician.

'I'm sorry, but we have our rules.'

And with that, St. Peter escorts him to the elevator and he goes down, down, down to hell. The doors open and he finds himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his friends and other politicians who had worked with him.

Everyone is very happy and in evening dress. They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the people.

They play a friendly game of golf and then dine on lobster, caviar and champagne.

Also present is the devil, who really is a very friendly guy who has a good time dancing and telling jokes. They are having such a good time that before he realizes it, it is time to go.

Everyone gives him a hearty farewell and waves while the elevator rises...

The elevator goes up, up, up and the door reopens on heaven where St. Peter is waiting for him.

'Now it's time to visit heaven.'

So, 24 hours pass with the politician joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and, before he realizes it, the 24 hours have gone by and St. Peter returns.

'Well, then, you've spent a day in hell and another in heaven. Now choose your eternity.'

The senator reflects for a minute, then he answers: 'Well, I would never have said it before, I mean heaven has been delightful, but I think I would be better off in hell.'

So St. Peter escorts him to the elevator and he goes down, down, down to hell.

Now the doors of the elevator open and he's in the middle of a barren land covered with waste and garbage.

He sees all his friends, dressed in rags, picking up the trash and putting it in black bags as more trash falls from above.

The devil comes over to him and puts his arm around his shoulder. 'I don't understand,' stammers the politician. 'Yesterday I was here and there was a golf course and clubhouse, and we ate lobster and caviar, drank champagne, and danced and had a great time. Now there's just a wasteland full of garbage and my friends look miserable. What happened?'

The devil looks at him, smiles and says, 'Yesterday we were campaigning. Today you voted.'


- credit to http://groups.yahoo.com/group/bills_funnybone

Who would I vote for if I couldn't vote for myself?

I've long thought that candidates should be asked this question, since it would reveal quite a lot about their thinking.

So I better apply that to myself and answer it.

I'd be voting Green, and not just because putting a young female Athabasca U professor from France into the Alberta legislature would impressively diversify the old boys club. When I was living in the federal riding of Ottawa Centre I was fortunate to have David Chernushenko on the ballot. Because environmental degradation is an externality, it is entirely consistent with sound policy to recognize that there is a role for government here. I was disappointed when Chernushenko lost the federal Green party leadership to Elizabeth May, who has the objective of "renegotiating" NAFTA. A carbon tax that is revenue neutral is potentially sound policy, Maude Barlow style activism is not. The PCs, Liberals, and NDP have all been proven to be tax and spend parties. The Alberta Greens could be as well but aren't necessarily. I also think that it is entirely possible to make the environment a priority without overprioritizing the mitigation of carbon dioxide emissions. The Green candidate in my riding mentions a greener public transportation system, promoting mixed use neighbourhoods, and the water supply instead of CO2 abatement, which is a prioritization I agree with.

If I couldn't vote Green, I'd probably vote PC, although I noted below a good argument for voting NDP. Tony Vandermeer supports my party's call for the immediate elimination of health premiums and raising the basic personal exemption to $20K. How Tony would accomplish that as a backbencher in a top-down organization that does not support those policies I don't know, but it least he recognizes a sound economic policy that would actually help the less fortunate.

Quote of the day

"Our politicians won't say what's on their minds, they won't engage in real debate."
- Keith Brownsey, political scientist at Mount Royal College

I see only one solution here, and that's to elect politicians that DO say what's on their minds and engage in real debate, even if you don't agree with them.

Ray Martin ignored my effort to contact him and the only direct quote from him I've seen on his website or in his campaign material is a vacuous

The Premier's lack of vision and waiting on important issues has not gone unnoticed. Albertans deserve stronger leadership and more decisive action in the legislature.


But I'd still be more inclined to vote for Ray than Dawit Isaac because I don't believe I've ever met a politician more averse to "real debate" than Dawit Isaac. At least you know that Ray Martin is going to be fighting for what he believes in when he does battle against the corporate agenda. Who is Dawit Isaac going to fight? Apparently Isaac just believes in what nobody opposes, like strong, vibrant, and safe communities. He says he is neither right nor left. Fine, I resist those labels as well, but that's because I have an identifiable theoretical / philosophical / ideological approach that academics or theoreticians would recognize called pro-growth economics. And people do oppose pro-growth economics... every time they want to kill a free trade deal, a corporate or investment tax cut, and so on.

People tell me they are scared by politicians who are left or right wing ideologues. I'm not nearly as scared of them as I am of highly ambitious politicians who don't have an ideology. Why? Because an ideologue isn't in it for himself or herself. He or she is in it to push an IDEA. Now that I've reached the end of the campaign period I look back and wonder how Dawit Isaac could have put the enormous effort he did into winning this riding. I've wiped out on icy sidewalks several times by simply being out there so much, I feel drained after hours on the street, and I've faced rejection on a regular basis, which doesn't make anyone feel happier. I don't like interrupting people but often did because I felt I had to or else they wouldn't have a fully informed choice. I've done it because the public policy being pursued by this government is contrary to my education in law, business, and economics, and the other parties would pursue the misguided policy of fiscal overstimulus even more tenaciously. The average annual salary for an investment banker is several hundreds of thousands of dollars, so it's not certainly not because I can't get another decent paying job. Dawit Isaac is certainly a driven man but I don't know what's driving him beyond a need to achieve. What's been wrong with Ray Martin's service? You don't like his ideology? Well, what's wrong with it then, Dawit?

Guba endorses Brian Dell!

FOR IMMEDIATE RELEASE:

Edmonton: Taking a break after a hard day's campaigning Saturday, Edmonton Beverly - Clareview candidate Brian Dell attended the U of Alberta Golden Bears' hockey game and met team mascot Guba! Guba, who cannot speak, indicated nonverbally his endorsement of Brian Dell!!!*

When asked about landing the biggest endorsement of the 2008 Alberta Election campaign, Brian Dell noted that "Guba is without question Alberta's most respected and authoritative public figure, and I am delighted to have his enormous prestige behind me."

*disclaimer: Guba's endorsement of any candidate does not preclude Guba's potential endorsement of other, competing candidates as well

Stelmach says he's "right" wing

If you're voting for the Wildrose Alliance, I'd certainly concede that you're "taking away" from the other parties, which include the P"C" party. Stelmach, however, adds that this is "taking away from the right".

I'd say this suggests the P"C" party inverts the old adage that the federal Liberals "campaign from the left and govern from the right" were it not for the fact that when Stelmach recently rang up close to a billion $ in spending promises in a single 10-day stretch (which works out to about a thousand dollars a second), that looks a lot like campaigning from the left as well as governing from the left. Perhaps Stelmach felt he had to set the pace for Kevin Taft, who in turn made 40 spending promises in just the first 9 days of the Liberal campaign.

However the P"C"s campaign, it is clear enough how they govern. Last year's budget cranked spending up 17%, a rate well in excess of the growth in the economy (which was 4.5% in 2007), meaning a significant increase in the size of government. Stelmach's only tax move of significant note has been to raise taxes on business.

If that's a right wing government, what would a left wing one look like?

If Stelmach is styling himself as being on the "right", I must be too, correct? What I am is a believer in pro-growth economics. To the extent that overlaps with right wing politics, I'm indeed right wing. But the label is unhelpful because it implies that I am opposed to things like rent control because of some sort of deep seated "right wing" twist in my character instead of because of facts and argument. More than 90% of economists oppose rent control and support the principle of free trade, for example, but are economists inherently "right wing"?

Saturday, March 1, 2008

unlucky man with Edmonton Journal

You'll have to excuse my complaining tonight; I've been beating the hustings until 9 pm today and am physically exhausted. Back to it tomorrow!

When the Edmonton Journal asked me for my 3 priorities, I said my first was "reduce government spending that is raising the cost of living". If you've been following my campaign, you'd know that a crucial issue for me is the fact that Stelmach's injection of fiscal stimulus (17% spending increase in the last budget, to per person levels almost 40% greater than 'big government' Quebec) is the worst possible remedy to our shortages. It exacerbates the demand pressures instead of solving them.

Yet Thursday's Journal says that my number 1 priority is "Reduce government spending." thus creating a period where none existed. Presumably the extra 7 words had to be elided for space reasons. After all, how could the Green candidate get her 22 word answer for her #1 in if I was quoted in full? I mean, she is for both "affordable and accessible" housing, and cutting that back to either "affordable" or "accessible" would do unspeakable violence to her meaning! But perhaps I'm too harsh: the supplied photo for Ms Pivot indicates that the Greens take Beverly - Clareview's cutest contender prize in a landslide. But how necessary was it to have the Social Credit candidate's "Words of Wisdom" that "One person can make a difference - BELIEVE in yourself"? I could get through one more day sans that exhortation, but perhaps I'm a freak.

I cannot fault any reader of the Journal for thinking I have no political sense: my second priority, "cut taxes", obviously implies the alleged first, "cut spending", so why would any politician LEAD with what is, for the voters, the necessary but negative corollary of cutting taxes? My critical "crowding out" point bounces right over the public policy debate to land on the Journal's cutting room floor.

From Wikipedia's "crowding out" article:

Crowding out is most serious when an economy is already at potential output or full employment. Then the government's expansionary fiscal policy encourages increased prices, which lead to an increased demand for money. ... At potential output, businesses are in no need of markets, so that there is no room for an accelerator effect. More directly, if the economy stays at full employment gross domestic product, any increase in government purchases shifts resources away the private sector. This phenomenon is sometimes called "real" crowding out.
.

On the bright side, were it not for the redoubtable Journal, the good citizens of River City would remain in woeful ignorance of my "Favourite Song"...

God's given me a pretty fair hand
got a house and a piece of land
a few dollars in a coffee can;
my old truck's still running good
my ticker's tickin like they say it should
I've got supper in the oven
a good woman's lovin
and one more day to be my little kid's dad,
Lord knows Im a lucky man.
- Montgomery Gentry