tag:blogger.com,1999:blog-68974794811466238902024-03-04T23:10:26.937-07:00Brian Dellyet another punditBrian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.comBlogger374125tag:blogger.com,1999:blog-6897479481146623890.post-9131767851545059352020-11-23T18:20:00.003-07:002020-11-23T18:59:16.145-07:00If there's to be another Edmonton lockdown then acknowledge the excesses of the first<p>COVID-19 has arrived in Edmonton. No dispute there. At issue, however, is whether it <i>really</i> arrived prior to October. </p><p>If the City had kept its power dry until recently, one could expect new restrictions to be reasonably well received. As it stands though, people recall all too well the restrictions that were in place from March to June/July and how, especially but by no means entirely, in hindsight they were overkill with the exception of nursing home restrictions. Not all people, of course, and perhaps not you, dear reader, but let's review, in rough order from the outrageous to the understandable but nonetheless mistaken, the policies (or, in the case of masks, the way they were communicated) that need to be acknowledged as having been in error or at least of far more doubtful utility than was admitted at the time. </p><p><b>Outdoor Playgrounds</b></p><p>The City closed playgrounds in March but we knew, or could have known, that for SARS 2003 although the virus was detectable on surfaces no one was ever able to grow the virus from the collected samples. Samples were taken in Bangkok, Taipei, and Toronto hospitals but all were culture negative. There wasn't a single case of confirmed "fomite" transmission for SARS-CoV-1 but we're supposed to believe fomite transmission is a serious risk with version #2 when those fomites are exposed to to the elements including solar radiation? We also had SARS-CoV-2 research on the point by early March. This was published by Michael Osterholm's University of Minnesota's Centre for Infectious Disease Research and Policy (CIDRAP) on March 9:</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwFZBKPG9eYGYlbUuIWLvR1wDWcoCaO6ASgEeWdhEAohAr8mubvss_J9N9ZyxYR5ZNxVOoe6DOrcH9tkklbM17fxDSzU7NcW-8_XgsQWxIgb6TVW-JoQfsex1qaNybIu-Xxab__MLfdDtp/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="386" data-original-width="1200" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwFZBKPG9eYGYlbUuIWLvR1wDWcoCaO6ASgEeWdhEAohAr8mubvss_J9N9ZyxYR5ZNxVOoe6DOrcH9tkklbM17fxDSzU7NcW-8_XgsQWxIgb6TVW-JoQfsex1qaNybIu-Xxab__MLfdDtp/w374-h120/image.png" width="374" /></a></div>Now maybe it's too much to ask city councillors to be aware of this before they decided a serious crackdown on outdoor play was required. But we had a local medical authority, as strong a local authority as one can find, in fact, <a href="https://www.cbc.ca/news/canada/edmonton/covid-coronavirus-mark-joffe-alberta-health-edmonton-1.5506878">specifically address</a> the playgrounds issue:<p></p><p><span face="-apple-system, system-ui, "Segoe UI", Roboto, Helvetica, Arial, sans-serif" style="background-color: rgba(0, 0, 0, 0.03); color: #0f1419; font-size: 15px; white-space: pre-wrap;">"Q: What about taking children to outdoor playgrounds? A: Going to playgrounds but maintaining social distance so there isn't a large group of kids congregating, it's perfectly safe."</span></p><p>This from Mark Joffe, VP and Medical Director for Northern Alberta at AHS, who is also a Department of Medicine professor at the U of A and an adjunct professor in medical microbiology and immunology at the School of Public Health. If you work for AHS odds are you know who Joffe is. </p><p>Now you may have followed the weblink above to the CBC article and noted that what I quoted above does not appear in the article. That's because <i>after the cities closed playgrounds the CBC deleted Joffe's statement about playgrounds being safe</i>. Don't believe me? Check the comments. Do you see Matt Beaubien quoting the now deleted statement?</p><p>Note the sequence here: an expert weighs in, politicians defy the expert (and cite zero experts or evidence to support their own take), the mainstream media then scrubs the record to accord with The Truth handed down by City Council. </p><p>The appropriate remedy to this outrage by both City Council and the CBC is apology. Not an update or correction, an apology. Freedoms were taken away without evidence, even contrary to evidence, and the MSM colluded with this.</p><p>Hinshaw's reaction, in case you were wondering, was to shrug "most playgrounds are now closed across the province." No profile in courage, that, but at least her statement was based on observed facts. </p><p><b>Cancelled surgeries</b></p><p>Here's Edmonton Zone hospitalizations to date, courtesy of @ByMatthewBlack:<br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyMMaU1jDr2VorGELoC_1zv6YDtGDKcHQGST_sdxp8G0sfMkkWta5nl3qm-AHUf-GePqz584ediRj34XqwXBY5DJ5YqoEV-F6BLBYGD4HQ1VJfS-xMExP_yQ4g5rValfAX53RK4FwYSVVn/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="659" data-original-width="1533" height="172" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyMMaU1jDr2VorGELoC_1zv6YDtGDKcHQGST_sdxp8G0sfMkkWta5nl3qm-AHUf-GePqz584ediRj34XqwXBY5DJ5YqoEV-F6BLBYGD4HQ1VJfS-xMExP_yQ4g5rValfAX53RK4FwYSVVn/w401-h172/image.png" width="401" /></a></div><br />Hospitalizations at any given point in time never exceeded 10 until late June (while Zone population is more than 1.3 million), by which time more than three months had passed and #Lockdown1 was ending. 10 when AHS had postponed enough surgeries and repurposed enough ORs/surgical recovery rooms to free up 1500 beds provincially for COVID by April 8 and 2250 by April 15. <i>Just for COVID</i>. And ICU admissions in the Zone apparently never exceeded 4 during this period.<p></p><p>I'll grant that the fact that we ended up with all the idle space and idle clinical staff that we did was not very foreseeable in March. There were hints, though, in the fact that for all the horror stories coming out of Lombardy and NYC, stories of swamped healthcare facilities weren't there to the extent one would expect when journos were surely looking for such stories. And for all the exponential growth models going around, it was still notable how it was believed at the time that it would take quite a while yet for interior and less connected regions like Montana to be hit. Edmonton is not New York City and as such a wait and see approach would have been better advised given the consequences of cancelling surgeries. It's particularly tragic in the Canadian healthcare system given our wait lists.</p><p>While this may have been one of the most understandable mistakes it's also the most consequential. Even for people who didn't have their surgery postponed, how many didn't seek early intervention for emerging heart problems for fear of the hospital already being full of COVID patients? How many childhood vaccinations were missed?</p><p>I'm not saying all the physicians currently warning of filling hospitals are false prophets. I'm saying it should be acknowledged that in April there were large numbers of AHS staff who didn't have patients to care for and unused capacity but this time it's different. Admit that demand was overestimated last time and people will take the new estimates more seriously.</p><p><b>Closed Libraries</b></p><p>This one's something of a pet peeve. I have a four year old and if I can't read to her what am I supposed to do? It's not like she can go to either indoor or outdoor playgrounds! Never mind preschool, dance class, etc etc. Sure, I can buy books, and did, but her mother is Chinese and needs Chinese books to read to her. I simply couldn't acquire those like Edmonton Public Libraries could. Not a big deal, some might say. Sure, but the remedy here also would have been an exceedingly easy deal: allow people to put books on hold through the online catalogue that they then pick up from a branch by appointment. It shouldn't have taken <i>months</i> to figure out a solution there. And the situation was not so urgent in mid-March that the public couldn't have gotten 24 hours notice of the closures so that they could pick up their holds. If we are talking a two week pandemic then, sure, maybe every day counts, but it was apparent enough to those of us who were paying attention that this pandemic would be with us for many months to come.</p><p><b>Closed Elementary Schools</b></p><p>This didn't impact me personally but this was clearly a major mistake in Edmonton. It was apparent very early on that young children were not being threatened by COVID any more than flu (in fact less so) with the few studies suggesting otherwise having obvious flaws. It's one thing to have high schoolers go online and quite another to expect a Grade 1 student to rack up hours of screen time to edifying effect unless constantly supervised. That the education of children of lower income families would be disproportionately impacted was also totally predictable.</p><p>The saving grace has been that Edmonton students were able to go back in September because teacher unions aren't quite as powerful as they are south of the border. I'm routinely amazed at how many opinion leaders in the US can demand "close the schools!" while having no interest at all in closing daycares never mind that daycares are notorious cold and flu spreaders.</p><p><b>Masks</b></p><p>This one's different in that I wouldn't call Edmonton's mask mandate a mistake. I wear a mask almost continually when I'm outside the home unless I'm in the car or outdoors. And have been since April (mostly due to in-laws in China sending me masks that weren't then generally available here). </p><p>But can we please stop moralizing the issue of members of the general public without symptoms wearing masks as the Enlightened versus the dark forces of obscurantism? Let's review what the Enlightened were saying up until the end of March:</p><p></p><ul style="text-align: left;"><li>European Centre for Disease Prevention and Control (ECDC) said evidence that mask wearing slows virus spread exists only for symptomatic people wearing masks</li><li>The ECDC was in turn cited by the Canadian government when discussing the mask issue</li><li><a href="https://www.cnn.com/2020/03/30/world/coronavirus-who-masks-recommendation-trnd/index.html">WHO stands by recommendation to not wear masks if you are not sick or not caring for someone who is sick</a></li><li>"<a href="https://twitter.com/Surgeon_General/status/1233725785283932160">Seriously people- STOP BUYING MASKS! They are NOT effective in preventing general public from catching #Coronavirus"</a> - US Surgeon General</li><li>"There is no role for these masks in the community" - CDC Director Robert Redfield House Foreign Affairs Committee testimony</li><li>"<a href="https://jamanetwork.com/journals/jama/fullarticle/2762694">there is no evidence to suggest that face masks worn by healthy individuals are effective</a>" - Journal of the American Medical Association</li><li>"<a href="https://www.youtube.com/watch?v=aYFTq_xkKg0">if you are healthy there is not thought to be any additional benefit to wearing a mask</a>" - Mayo Clinic</li><li>there is very little evidence widespread benefit for members of the public wearing masks - UK NHS</li><li>There is not enough evidence to prove that wearing a surgical mask significantly reduces a healthy person’s risk of becoming infected while wearing it - Federal Ministry of Health, Germany (Bundesministerium für Gesundheit)</li></ul><div>There's two possibilities before us now regarding the Received Wisdom about masks: 1) the above takes aren't as wrong as commonly supposed 2) the current Received Wisdom is not as right as commonly supposed.</div><div><br /></div><div>The true answer is probably somewhere in the middle. It does make sense to say that there was probably overconcern about the general public contaminating themselves when donning or doffing given the gradual (too gradual) realization that surface contamination is not a significant danger with COVID. But level with the public please. I strongly suspect that what <i>really </i>works is a fitted N95 but our experts are not telling us that because there isn't enough N95 supply and certainly not enough capacity to get everyone fitted. But just state that if that's the case.</div><div><br /></div><div>The reaction to the recent Danish study finding no significant benefit is telling. "Just because it didn't find a highly significant benefit doesn't mean there isn't s small significant benefit!" Well of course. But just admit that you still have no hard evidence and the mask thing remains an educated guess! There need not be any shame in that. An educated guess is good enough for me. But please stop trying to memory hole what the experts were telling his up until April.</div><div><br /></div><div><b>The endgame</b></div><div><br /></div><div>When I see people complain about Premier Kenney waiting for Trudeau to introduce a national mask mandate so that the federal level can take the political heat I have to ask, do you not recall how Mayor Iveson complained about having to take the hit for introducing an Edmonton mask mandate because the province didn't act? Of course the politicians are all trying to pass the buck. The biggest problem I have with #WhereIsKenney is that there isn't nearly enough recognition of the fact that public policy doesn't seem to make that much difference relative to the things that can't be changed by a politician overnight like a community's demographic/cultural profile.</div><div><br /></div><div>Where, may I ask, were the demands that Mayor Nenshi take personal responsibility for the fact active cases in the city of Calgary were nearly twenty (20!) times active cases in Edmonton at one point? Sure, public policy makes a difference but there isn't nearly enough evidence to justify all the morality tales people are telling about why such and such a city or province/state or country is doing better or worse.</div><div><br /></div><div>How far away a vaccine (or some sort of endgame) happens to be is extremely relevant to the debate here yet is rarely referenced. A key reason why I feel the March to June lockdown was a mistake is that it wasn't sustainable for a full year and a full year (at least) is what informed people knew it would take before we could talk about getting on the other side of this pandemic. </div><div><br /></div><div>The UK was roundly criticized in March for not moving more rapidly lock down. Here's what I wrote at the time (March 16):</div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvUQ4DWMJ_x4_s4iMWrHk1gEMOCVvGT2mz10jOiEVwm24uDyodb1NpAAHsHCLCD-gw2yoRXvFkuB6MPwvR0IvMCDBSNwIjuSlBUL0UX7yqfPG7JpWMJXwD7Oqcrahelk56bV4xLIkf32u0/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1144" data-original-width="1146" height="377" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvUQ4DWMJ_x4_s4iMWrHk1gEMOCVvGT2mz10jOiEVwm24uDyodb1NpAAHsHCLCD-gw2yoRXvFkuB6MPwvR0IvMCDBSNwIjuSlBUL0UX7yqfPG7JpWMJXwD7Oqcrahelk56bV4xLIkf32u0/w377-h377/image.png" width="377" /></a></div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">Say what you will about what I called the "British strategy" but <i>at least they put their minds to it</i>. There was no evidence at all of such foresight on Edmonton city council or in the mayor's office in March. Adopting this strategy would have made a lot of sense for Edmonton but more importantly <i>articulating such a strategy would have prepared the public for what we are facing now</i>. At a minimum, ease up at the end of April when it was apparent the hospitals were empty and seasonality could work in our favour (instead of dragging out the restrictions into June/July as they were) and explain to people that they need to get out of the house when it comes to socializing and make the most of their summer because we will need to be prepared to lock down when the snow comes and we are forced indoors.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">What's done, or wasn't done, is done. But it isn't too late to admit that too much was asked of too many for too long before now asking them for more.</div><br /></div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-60562804120057615602019-08-17T12:18:00.000-06:002019-08-17T12:58:27.928-06:00Hong Kong: China's regret?<div dir="ltr" style="text-align: left;" trbidi="on">
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I’ve been of the view for some time now that if multiparty democracy comes to China, it’ll be because it was first decided that allowing it in Hong Kong would be the least costly option following which Beijing couldn’t keep it quarantined to the HK Special Administrative Region (HKSAR). This isn’t based on some grand China collapse theory but on my personal experience of both Hong Kongers on the one side and “mainlanders” on the other. I’ve been to China more times than I can count, adding up by this time to a couple years’ worth of time in the country, and the impression I get of the prospects for political freedom there remind me of a phrase by SNL producer-writer James Downey: “It’s like being a rock climber looking up at a thousand-foot-high face of solid obsidian, polished and oiled.” It’s very hard to see where democracy could find its purchase.</div>
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Another analogy that comes to mind is that of a nuclear containment building. Within it are multiple barriers to prevent contamination of what Chinese state media calls the “political ecology” and the system is finely engineered to allow controlled releases within the barriers to preclude pressures from building up to uncontrollable levels. It really does feel that it would take a tsunami to break the system down. I recall a Harbin local who would voice a few criticisms from time to time but then, when the topic of the party’s founding anniversary celebrations came up, nonchalantly referred to “our party”. The idea that the nation is the party and the party is the nation was been very successfully propagated. That the military and armed police forces are not structurally loyal to or accountable to <i>China</i> but solely to the <i>Party</i> seems of little popular concern.</div>
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The mentality in the SAR, at least with young people who were born in HK, is far more familiar to westerners. In fact, I’d say the typical HK youth takes a dimmer view of the society on the north side of the Shenzhen border (commonly called the "mainland", especially by those who don't want to call it a Hong Kong - China border) than the typical western expat living on the mainland side. When I was at Wikimania 2013 I stayed in Hong Kong Baptist University residences and when I was talking to the students about where to get the bus to the border (I was living in Chengdu at the time) it was like I had asked about going outside the wall that kept out the living dead.</div>
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Polls say that the extent to which HKers identify as Chinese has been declining since the 1997 handover, paralleling a trend seen in Taiwan, with 90% of 18 to 29 year olds recently <a href="https://www.hongkongfp.com/2019/06/28/hongkongers-identifying-chinese-record-low-10-youth-proud-citizens-poll/">telling a pollster</a> they were not proud to be Chinese nationals. This, more than anything in my view, blunts the effectiveness of the central government’s public opinion tools in Hong Kong, which are already weakened by the fact that social media in particular isn’t blocked in the SAR like it is in the mainland. This while GDP per capita, an increase in which Beijing trots out as the solution to almost every instance of popular dissatisfaction whether at home or abroad, has been rising with Hong Kong exceeding US GDP per capita on a purchasing power parity (PPP) basis (never mind Canada) and even exceeding Norway according to the World Bank’s 2018 calculations. It’s in fact more plausible that what we’ve been seeing in HK is because of the presence of prosperity than the lack of it. While Hong Kong has the world’s most expensive real estate on a square meter basis that’s been the case for a long time and comes with the territory when a location is desirable.</div>
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I would not be surprised were we to learn that the powers that be in Zhongnanhai secretly regret gaining control of HK from the British on the “one country, two systems” (1C2S) basis that they did, a basis that I believe was set out by the Sino-British Joint-Declaration of 1984. It arguably just postpones the problem of how Beijing is to take control of HK civil society. The bet presumably was that the mainland would be more similar in 2047 than 1997, and economically it’s certainly the case that the mainland will have made enormous progress in catching up economically (indeed it already has). But what if the ease of integration on that count isn't the count that matters? When it comes to political freedom the mainland has been moving further away from HK (and Taiwan) since Xi took over in 2012. When thinking about the end game for HK, I find myself returning to the fact that if HK were still British at this time, Beijing wouldn’t have the problem it currently does. </div>
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The Party’s calculation may be that it's best to concede and let HKers elect their own leadership, which right now is deemed unacceptable because it could mean an unfriendly stance towards Beijing at the very top of local Hong Kong government, and then contain the democratic reform to the SAR by indefinitely maintaining, and even strengthening where necessary, the separation with the mainland that currently exists. But the Party could alternatively conclude that such a concession would be at odds with everything they purport to stand for and that the writing is on the wall that there is no way of asserting central authority over HK that isn’t what they’d recognize as colossally messy, such they might as well definitively assert that authority now when they can push the line that dealing with the political “terrorists” and the “riots” is beyond the capacity of the HK government. The calculation would be that it's going to just be more difficult when those 20-somethings are 28 years older. I don't see a middle way between these two routes that “pacifies” HK on a sustainable basis. One would think that intervention would be a violation of the Basic Law and/or 1C2S such that there would be a huge cost to the Party’s credibility when Beijing has been continually pushing the line that the root problem in HK is a failure on the part of protestors to respect the Basic Law and 1C2S but the Party could surely dress it up as answering a request for assistance coming from autonomous HK authorities. Asking said authorities to call for what would surely be the end of HK as we know it would of course be a big ask, but the Party seems to do quite well at getting what they want out of people who are in the positions they are in because the Party put them there. </div>
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No doubt Beijing will want to put off having to go one way or the other as long as possible. A military, or more precisely People's Armed Police, intervention could provoke a powerful reaction in the U.S. in particular, which could block US corporate investment in China, place heavy pressure on Chinese firms listed on US stock exchanges, and even cut China off from the SWIFT international payments channel. Indeed, it's more likely that we'd instead see, at least at first, a shut down of<span style="font-size: 11pt;"> HK’s internet and social media by subsuming it behind the Great Firewall. The outrage this would provoke within HK would be immense, it directly hitting perhaps the most valuable freedom and hitting everyone, not just the few who would be impacted by kicking in some doors in a police state round up, but would have the virtue of being a non-violent government action. If HK subsequently explodes in rebellion, which it might very well, it’d be then, and only then in my expectation, that the APCs roll. Seizing control of the internet and complete control of the media would be part of a longer term move to transform education, curriculum reform in HK being something that Beijing has tried its hand at before in HK and found difficult without popular support.</span></div>
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The most likely <i>short term</i> scenario nonetheless remains the protests dying off as the Umbrella Movement of 2014 did. The problem for Beijing is that they will most certainly be coming back unless they take one of the two routes I've described, the only question being when.</div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-35702323615718132982019-04-06T16:17:00.000-06:002019-04-06T19:12:46.495-06:00Alberta Election 2019<div dir="ltr" style="text-align: left;" trbidi="on">
Why haven't I blogged since 2014? Short answer is that I got married and have a little girl who turns 3 this summer. For those of you who have several kids under age 5, if you have have time for anything besides work and family matters I'm impressed! It's one thing to find 5 minutes to tweet and another to find an hour to blog.<br />
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So we have a provincial election a week from this coming Tuesday (on April 16). When I was heavily involved in the Wildrose Party a decade ago I ended up running in Edmonton Beverly-Clareview for the 2008 election as the Wildrose Alliance candidate. At the time I was only nominally living in the constituency and was planning to buy a home in Edmonton's southwest. In the end, though, I couldn't justify paying a lot more for the same property but in the southwest instead of the northeast, and ended up buying a new townhouse right in the middle of Beverly-Clareview (although on the east side of Victoria Trail). </div>
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This riding would be considered a safe NDP seat, especially if the NDP has inherited the Liberal vote, but nonetheless has enough curving residential roads that a centrist suburbanite could conceivably be elected in the right circumstances.</div>
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Which brings me to the question of who to vote for. If the NDP's apparent view of the election is the correct one, then it's a referendum on whether to persecute LGBTQ2S+ people or not. If homosexual acts were being criminalized I'd be inclined to think they are quite right to be taking the lead in giving more people their liberty. </div>
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But of course that's not what's going on. We've instead got what Licia Corbella calls out <a href="https://calgaryherald.com/news/local-news/corbella-ndps-attack-on-religious-schools-violates-the-charter">here</a>. If every Albertan read Corbella's piece, it would drive BIG turnout against the NDP at the polls. It's one thing to threaten religious schools with a loss of funding, and quite another to go after them saying expressing a belief in the "unchangeable and infallible truth of the Word of God" is violation of provincial law. </div>
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We have to give religious communities some space. That doesn't mean tolerating Branch Davidians in the province where the group leader takes 12 year olds as wives. It means stopping somewhere short, and I suggest well short, of basically declaring their belief system illegal. Trudeau-appointed Senator Paula Simons (who isn't doing a very convincing job of rebutting the Notley-Trudeau nexus allegation when she's acting as de facto NDP spokesperson in Ottawa) at least has acknowledged a conflict of rights:<br />
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The only problem with this (besides the strawman that deciding not to criminalize an action is akin to "wanting" that action) is that there's no Charter right to never be let go by a private sector employer. There's a good reason for this, of course, and that's the general principle that government stays out of interactions between citizens unless there is a sound reason to meddle. So it is that a religious organization's right to take an action for religious reasons without government interference isn't on the same level as the right of citizen to call on the government to get involved and exercise its coercion. There's a balance that has to be struck here between freedom of religion and other considerations and it ought to lean against bringing in the power of the state.<br />
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With public opinion having moved as far as it has it terms of normalizing LGBTQ2S+ self-identification or behaviour (however one looks at the question of whether it's a dispute over behaviour as opposed to identity, I disagree with those who contend it's just behaviour), the NDP inevitably has to keep reaching further and further if it's to maintain outrage levels and, by extension, political turn-out. Eventually it gets to the point where the majority of citizens ask if the Education Minister is making the most productive of use of his time.<br />
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I'll nonetheless say this for the NDP: Notley is genuinely trying to get a pipeline and it's really not fair to contend otherwise. But if Albertans trust the Conservatives more on that, well, what goes around comes around. The NDP has gone too hard for too long on the idea that Conservatives are not to be trusted on social issues to complain about how unfair it is to be perceived as anti- the energy business.<br />
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This isn't to say that I stand four-square behind the social policies of Kenney's UCP. It's rather to say that if one party is going to one extreme and another party to the other, the NDP is the more motivated to push the envelope and not admit that there's another side to the issue.<br />
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Which brings me to the question of whether I'm voting UCP. I must be right? I mean, I'm a former Wildroser and the Wildrose has been softened by its merger with the more centrist Progressive Conservatives such that if I have any objections to the UCP, it's that they are not right wing enough, no?<br />
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Here's the thing about that mis-perception of that Wildrose-PC merger: it's in fact Wildrose that was "softer" when it came to what matters, not with respect to the Prentice and earlier PCs so much as with respect to the Harper/Kenney crowd who represent current Conservatism in Alberta as surely as Trump = Republicanism south of the border. It was the political hardball practices and general Machiavellianism of the federal Conservative types moving into the Alberta conservative space that drove me out of provincial politics. Some might say I'm exaggerating the menace they represented and the issue was more my simply not liking populism and the international trend in right-of-centre politics to move downscale. But this is kind of like calling the Trump movement populist and leaving it at that. It is, but it's also nasty and most nasty for me is the epidemic of lying that's come with it. So, yeah, I do apply a value judgment to it that, for me, transcends ideology. I got into politics for what you might call ideological fiscal policy reasons, namely trying to call attention to the issues that Brooks DeCillia calls attention to <a href="https://www.cbc.ca/news/canada/calgary/opinion-election-challenges-we-actually-face-1.5081970?__vfz=medium%3Dsharebar">here</a> (early 2008, when I quixotically stood for office, would have been prime time to control spending) but after some time on the inside realized that policy doesn't matter as much as the typical outside voter thinks it does.<br />
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So of course I am not surprised in the least that the Kenney crowd cheated their way to control of the merged party. <i>I would have been surprised if they didn't</i>. When I was with Wildrose I'd heard about what was going on at federal Conservative nomination meetings and was thankful they are not happening at the provincial level. I then saw the writing on the wall saying it was just a matter of time.<br />
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So where does that leave me on the 16th? There are circumstances under which I might conceivably vote Liberal at the federal level. Some might consider that disloyalty to conservatism but my experience as a political activist taught me that a common ideology isn't enough to support affiliating with the unintelligent and unscrupulous. It won't happen with Trudeau and it would depend a lot on the other options but it's theoretically possible. Provincially, though, no, not since Kevin Taft was succeeded by David Swann anyway. There's a reason why the Liberal vote has largely gone to the NDP since then.<br />
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I understand the argument that marking one's X for the Alberta Party is throwing away your vote or splitting the vote. But when I ran myself in 2008 I had no hope at all of even getting a tenth of the vote never mind winning, so that argument doesn't go far with me. The AB Party has come up with a good marketing line and that's that the NDP and UCP are the vote splitters taking support from the centre. You can see this phenomenon clearly developing in the U.S. The fact is that if you vote for Kenney or vote for Trump, they're just going to double down on whatever they did to get as far as they have. Why wouldn't they? It doesn't mean never voting for the Conservative or the Republicans again, it means trying to stop a particular group from taking total control of the party or movement. The point isn't just to put a particular party in power but to make a political statement.<br />
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Here in my particular riding, the Alberta Party candidate, Jeff Walters, isn't just a name on the ballot. He's running a serious campaign. He also doesn't seem to have been sniffing around for an NDP nomination in the city where that would be the thing to do if you just want to get elected. He seems to have soured on a Kenney party he might have otherwise run for over the social issues hubbub which happens to be the one point on which I think the UCP may be unfairly perceived, but I'll nonetheless endorse him, not least because I've spent most of this post arguing that personal character matters and however much the riding's incumbent may be a nice guy with reasonable policy preferences (for an NDP man), we could use an upgrade and I think Jeff Walters will deliver it. I haven't met Mr Walters so will grant that I'm just guessing to an extent but I do think that for the first time ever this is the provincial election for me look past a party with "conservative" (or "Wildrose") in the name and to the party with Alberta in the name.</div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-79051628640199957282014-12-21T21:44:00.002-07:002014-12-22T07:56:58.949-07:00Five Questions for Danielle Smith<div dir="ltr" style="text-align: left;" trbidi="on">
Let's take a stroll down memory lane:<br />
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October 27, 2009: Wildrose office manager Heather McMullen advises a member, "As for floor crosses, we have a policy in place that any MLA wishing to cross the floor will have to first sit as an independent, then gain the support of the Executive of the party and Constituency Association, and prove that their decision is also supported by the residents of that riding."<br />
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January 5, 2010: Wildrose leader Danielle Smith tells Liza Yuzda of iNews 880 that "...party policy had been to require a by-election for 'floor crossers' but when it came to reality..." party policy didn't stop her from welcoming floor crossers Rob Anderson and Heather Forsyth without conditions. Smith goes on to invite listeners to think of the financial needs of the crossers, saying that if they had to run in a by-election, there might be some period of time that they wouldn't be drawing their taxpayer funded salaries: "without an income for six months." We later learn that in fact there were conditions, but not conditions demanded OF the crossers, <a href="http://www.cbc.ca/news/canada/manitoba/elections-alberta-will-not-probe-wildrose-40k-payout-1.1239021">rather,</a> "Danielle Smith had agreed to give each of their constituency associations $20 000 prior to crossing."<br />
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December 18, 2014: Danielle is "<a href="http://www.calgarysun.com/2014/12/18/wildrose-leader-says-partys-social-conservatives-helped-pushed-her-to-tories">moved to tears</a>" recounting a November 15 policy vote where, in a close vote, the membership declined to revisit and enshrine as policy a motion about rights that the membership had approved the previous year. "It really was a turning point. It was one thing that made it impossible for me to continue as leader," she says.<br />
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Some questions for Danielle:<br />
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1) If you could ignore party policy in January 2010 in order to have Rob Anderson come over without conditions (and in fact even let Anderson set financial conditions in a secret deal), you could ignore last month's policy vote, no? Never mind going even further and <a href="http://www.edmontonjournal.com/Wildrose+members+reject+definitive+statement+equality+rights/10385317/story.html">defending last month's vote</a> saying "I think that the nature of the debate was that [the membership was] concerned there might be something excluded in that long list. I think that's a reasonable position to take." If your conscience was as troubled as you now say it is, you could have resigned, or replied to the vote by asking at the AGM for a democratic mandate for what you now demand, namely, a merger with the PCs, no?<br />
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2) In 2010 over at the <i>Western Standard</i> Matt Johnston <a href="http://westernstandard.blogs.com/shotgun/2010/01/anti-family-anti-freedom-heather-forsyth-is-a-bad-fit-for-the-new-wildrose-alliance.html">complained</a> about Heather Forsyth's social conservatism. "Sadly, as an early defector to the Wildrose Alliance, Forsyth will likely be given prominence in the party that could put her in a position to shape policy," Johnston noted. Why are you now complaining about the membership when it was <i>your </i>idea, not the membership's, to welcome Forsyth as a floor crosser? More to the point, please explain that "Wildrose Statement on Ontario Court Prostitution Ruling." I invite you to look again at the <a href="http://westernstandard.blogs.com/shotgun/2010/09/wild-rose-alliance-slams-prostitution-decision/comments/page/1/#comments">reaction</a> on the <i>Western Standard</i> to that "Statement." Colby Cosh, writing in <i>Maclean's</i>, complained about it. I, no libertarian, <a href="http://briandell.blogspot.ca/2010/10/state-of-rose-wildrose-vs-libertarians.html">complained about it</a> as a gratuitous poke in the eye of libertarians. Yet you, party leader, let that statement go out, without any evidence the membership wanted Wildrose to adopt such a position, and now complain that it's the so-cons in the rank and file <i>membership </i>that are bringing you to tears? You've got Forsyth and Anderson's back, do you? You reacted to Towle's and Donovan's crossing to the PCs <a href="http://www.cbc.ca/news/canada/edmonton/wildrose-mlas-kerry-towle-and-ian-donovan-cross-floor-to-tories-1.2847378">by saying</a> "Today I was proud to be in the legislature with Rob Anderson and Heather Forsyth at my side [two of the biggest so-cons in the Leg]. Rob and Heather crossed the floor from government to opposition because of principle [while Towle and Donovan did] the opposite [by joining the PCs]." <br />
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3) Rob "crossed the floor from government to opposition because of principle" and he crossed back because of principle, right? Then <a href="http://news.nationalpost.com/2014/12/18/how-preston-manning-convinced-wildrose-mlas-to-join-mass-defection/">explain his comment</a>, "If only three or four decided to [cross the floor this month], I don't think it would have happened." Why is it that the right thing would not have been done if only "three or four" of you decided to do it? Why does it take a crowd? Anderson, <a href="http://www.cbc.ca/news/canada/edmonton/wildrose-caucus-meeting-over-merger-with-alberta-conservatives-1.2874525">who brought the mass crossing idea to caucus</a> (why wasn't it YOUR idea, Danielle, if you're the leader? Anderson gave you, the leader, "<a href="http://www.theglobeandmail.com/news/alberta/smith-and-prentices-alberta-political-marriage-was-a-well-negotiated-union/article22169199/">an ultimatum to join the mass defection</a>"???), successfully lobbies 8 people to join him in floor crossing. To win those seats back, Wildrose campaign workers and donors will have to lobby well over 8 thousand voters, maybe 80 thousand. Do you really think that's fair? How about FIRST changing teams, <i>openly</i>, and THEN working to shrink the Wildrose caucus?<br />
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4) Last Thursday you said the plot had to go down in secret because, had there been an open effort to lobby ordinary Albertans to endorse the floor crossing, the official opposition and the government would have been in limbo for 4 months. Yet you've <a href="http://www.cbc.ca/news/canada/calgary/what-could-wildrose-s-danielle-smith-possibly-have-been-thinking-1.2878471">admitted</a> that "discussions have been going on for months" anyway! If they could go on "for months" in secret, they could have gone on in the open, no?<br />
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5) This past week you complained that "the most radical elements show up and choose the policy direction." You've attended more AGMs than I have, so I think you know that the truth is that, year after year, "the most radical" social conservatives have shown up to propose socially conservative planks and they routinely get outvoted. As for the Allan Hunspergers in the party, yes, the most radical elements HAVE been known to get someone like Hunsperger nominated, but if you don't like that, then why wasn't more effort put into overseeing the development of consistency associations, since large associations are more likely to ensure due diligence is done with respect to nominations? I was heavily involved in setting up Edmonton Whitemud's constituency association and I called on the party leadership at the time to get a separate association up and running south of the Anthony Henday as early as possible in order to keep motivated and moderate constituency workers involved yet I couldn't get any interest. The result was a rump association relative to the north side of the Henday and Hunsperger's nomination.<br />
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In April 2012 when I ruefully <a href="http://briandell.blogspot.ca/2012/04/wildrose-government.html">recounted</a> how Wildrose had arrived on the doorstep of government, I said "I trust Danielle." I was mistaken about that, and the main reason I was mistaken is because I didn't fully appreciate just how weak your leadership was. You abdicated party leadership over to the ring leader of this destruction of the Wildrose caucus, and then tried to come up with excuses like blaming social conservatives in the membership that you've never met while never confronting the caucus members you regularly see face-to-face. <br />
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It didn't have to be this way. As Maurice Tougas <a href="http://mauricetougas.wordpress.com/2014/12/17/wildrose-rollover-a-betrayal-of-epic-proportions/">observes</a>, <i>"Winning isn't the only thing that matters in politics. There are a few corny old things like public service and honouring the people who voted for you that still matter. Liberals and New Democrats run for office knowing their odds of winning their seats are long, and the odds of winning government are longer still; say, the distance from the Earth to Jupiter. But they run anyway, because they feel they have something to offer, or something to say." </i></div>
Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com2tag:blogger.com,1999:blog-6897479481146623890.post-76697414642063916312013-01-09T00:16:00.000-07:002013-01-10T23:25:02.937-07:00Trillion dollar coin an insult to the Fed, not common sense<div dir="ltr" style="text-align: left;" trbidi="on">
<b>Before</b> I get to the proposed solution to the anticipated U.S. debt ceiling crisis of just printing the money to keep the spending flowing (by striking a $1 trillion coin) thus obviating a need for Congressional authorization for additional borrowing, I'll make <b>a comment on the nomination of Chuck Hagel</b> for Secretary of Defence.<br />
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<a href="http://0.tqn.com/d/usconservatives/1/0/1/6/-/-/amconslogo.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="99" src="http://0.tqn.com/d/usconservatives/1/0/1/6/-/-/amconslogo.jpg" width="320" /></a>The contributors to paleocon flagship <i>The American Conservativ</i>e are positively giddy, <a href="http://www.theamericanconservative.com/hagel-in-historys-cockpit/">saying</a> "No matter how the battle over his confirmation goes, it will be educational and point the country in a better direction." Libertarians who have distinguished themselves from and taken issue with neoconservatism in the past like the CATO Institute are also pleased, with Justin Logan <a href="http://www.cato.org/blog/why-americans-should-care-about-hagel-nomination">of the view</a> that "Hagel successfully running the DC gauntlet could be a perestroika moment in the American foreign and defense policy debate, and possibly even <b>loosen the neoconservative stranglehold on the GOP</b>." Fact is, the conservative pundit class is far more neo-con heavy than popular support would suggest (implying the reality of an influential lobby), and <a href="http://online.wsj.com/article/SB10001424052748703720504575376742991948412.html">neo-con nostrums</a> are received wisdom across the "right wing" spectrum of talking heads, from David Frum to Charles Krauthammer. The one palecon pundit with name recognition, 74 year old Pat Buchanan, is widely perceived as a crank. If the Hagel nomination stays in the headlines it may create an opportunity for a new generation of paleocon voices to attract a following. Last month the self-described neo-con John Agresto penned <a href="http://www.jackmillercenter.org/wp-content/uploads/2012/12/Was-Promoting-Democracy-a-Mistake1.pdf">a very interesting piece</a> on the need for neo-cons to re-evaluate.<br />
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Now what about <b>#MinttheCoin</b>? Apparently the first appearance of this idea is <a href="http://delong.typepad.com/sdj/2010/07/we-are-live-at-the-week-a-keynesian-voice-crying-in-the-wilderness-saying.html">a comment</a> by a lawyer named "beowulf" (later identified as one Carlos Mucha) on Brad DeLong's blog in July 2010. Beowulf expanded on the notion in <a href="http://my.firedoglake.com/beowulf/2011/01/03/coin-seigniorage-and-the-irrelevance-of-the-debt-limit/">his own blogpost</a> in January 2011. The concept then got traction on mainstream media hosts in July 2011 as the then debt ceiling debate caught fire. The idea rests on a legal loophole created by Congress in 1996 that authorized the Secretary of the Treasury to mint "platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time." Note that although there is a legal limit to how much paper currency can be in circulation, no such limit is specified here. The U.S. Mint would book the difference between the coin’s face value and its cost of production as seigniorage (marketing and distribution is normally deducted as well but those costs should be negligible here). As the Mint <a href="http://www.treasury.gov/about/budget-performance/Documents/20%20-%20FY%202013%20US%20Mint%20CJ.pdf">explains</a>, <b>seigniorage</b> is part of "off-budget receipts" and "is deposited periodically to the [United States Treasury] General Fund where it <b>reduces the government’s need to borrow</b>."<br />
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A lot of the media hosted bloggers haven <a href="http://www.motherjones.com/kevin-drum/2013/01/platinum-coins-and-fever-swamp">taken issue</a> with the <b>legality of the scheme</b>. But ask yourself if it is legal for the U.S. Mint to issue a $100 coin and use the seigniorage (which will be a little less than $100) to "reduce the government's need to borrow" by that amount. <a href="http://www.usmint.gov/mint_programs/american_eagles/?action=american_eagle_platinum_proof">Obviously it is</a>. Now why is it not legal to issue ten billion of those coins? And if that's legal what's the substantive difference between that and a single trillion dollar coin? Now Canada has a "<a href="http://www.cra-arc.gc.ca/E/pub/tp/ic88-2/ic88-2-e.html">general anti-avoidance" rule</a> whereby the government can challenge your exploitation of a tax loophole if the Crown can prove that your schemes are "so inconsistent with the general scheme of the [Income Tax] Act that they cannot have been within the contemplation of Parliament." But that sort of rule has to be specifically enacted, it's not part of the common law.<br />
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What about the economics? Suppose Timothy Geithner stops off at the Mint to collect the trillion dollar coin in person and on his way over to the Federal Reserve to deposit it happens to stop at a cinema and see a show. While sitting in his plush seat the coin rolls out of his pocket and ends up on the carpet. After leaving the cinema he notices the coin is missing and rushes back to the cinema. But it just so happens that you came upon the coin first and you are already on your way to your local bank to deposit it (knowing that you would have a hard time getting change at the local mall). Now instead of the U.S. Treasury getting to write cheques on that trillion without having to borrow the money, you get to do so! Now suppose the minting of the coin and Geither's actions happened to have been done in secret (perhaps to be announced later) and the management of your bank took no particular note of your deposit. Without the public info that might create expectations of inflation (and no additional lending by your bank on the basis of your deposit) would there be any inflation? Not so long as you haven't spent any of it. But if you did spend it it would eventually drive up inflation because each or your purchases would add to the quantity of dollars while the supply of goods and services remained the same. Note that <b>this inflation would not happen if you borrowed</b> the money because the borrowed money would have already been introduced into circulation. <br />
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<a href="http://talkingpointsmemo.com/platinum_coin_krugman150.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://talkingpointsmemo.com/platinum_coin_krugman150.jpg" /></a>Now Paul Krugman (visage at right from TPM) had me <a href="http://gregmankiw.blogspot.ca/2012/12/a-krugman-puzzler.html">puzzled</a> when he seemed to pooh-pooh the coin <a href="http://krugman.blogs.nytimes.com/2013/01/02/debt-in-a-time-of-zero/">on January 2</a>, saying "to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base." Krugman, of all people, succumbing to inflation fears? Krugman seemed to quickly refind the courage of his convictions, however, <a href="http://krugman.blogs.nytimes.com/2013/01/08/rage-against-the-coin/">saying</a> on January 8 "mint the darn coin." <br />
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If Krugman is correct that there isn't an economic policy objection, and there isn't a legal issue, then what's the problem? Consider the case where you've just found that trillion dollar coin. What could then stand between you and anything money could buy? The bank, of course. If the bank accepts your deposit, you're gold (or platinum?). As a for-profit institution, your bank should be eager to take your deposit, since it could vastly expand its (loan) business, but the Federal Reserve is not a profit centre. The Fed is not going to want to be a party to a major transaction that serves the government's fiscal purposes instead of its own monetary purposes. Now <b>the Fed might not object to accepting the coin <i>if</i> the transaction were guaranteed to be a one-off</b>. It already has <a href="http://www.clevelandfed.org/research/data/credit_easing/index.cfm">close to $3 trillion</a> on its balance sheet and plans to add another trillion in 2013 anyway (in part through purchases of<a href="http://www.mortgagenewsdaily.com/channels/pipelinepress/12132012-triad-virpack-dodd-frank.aspx"> more than double the average daily supply of mortgage-backed securities</a> aka MBS) so what's another trillion. The Fed could additionally "sterilize" the coin in terms of inflation by selling off a trillion of its other assets early. The contemporary Fed furthermore has an inflation fighting tool at hand in that it can pay interest on reserves so that banks are content with that income and don't lend on said reserves (see again the hypothetical above where your local bank just happens to ignore your trillion dollar deposit instead of expanding its lending business).<br />
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<a href="http://images.laws.com/finance/inflation-calculator.jpg?200" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://images.laws.com/finance/inflation-calculator.jpg?200" /></a>Now to be sure, there are real risks to yet another expansion of the Fed's balance sheet, not least of which is the substantial risk that markets will not react well to the <a href="http://www.reuters.com/article/2013/01/05/us-usa-fed-plosser-unwind-idUSBRE9040BC20130105">unwinding the Fed's oversized balance sheet</a> (<b>what is going to happen to housing if, or more precisely when, the Fed stops buying and instead dumps its trillion in MBS on the market?</b>). When you ask the people who say that there are no economic concerns at all, "why not mint $16 trillion in coins and pay off the whole debt?" they wave the question away as crazy talk but the question illustrates how the risk of inflation and financial instability is on a continuum. <b> Of greatest concern to the Fed, however, would be the precedent set with regard to who controls its balance sheet (and monetary policy in general</b>). At the end of the day, <b>the trillion dollar coin "solution" to the debt ceiling means printing money instead of borrowing it</b>. In terms of the mechanics there isn't a lot of difference between quantitative easing to stimulate the economy and printing money to finance the government's deficit spending but politically the difference is huge. The Fed wouldn't just be <b>surrendering its independence</b>, it'd appear to be doing so to Democrats in Washington over the objections of Republicans. Imposing on the central bank like this is the sort of thing one expects of Hugo Chavez, not the U.S. Treasury.<br />
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Now a reasonable question to ask here is why <b>the Fed's current handling of coinage</b> doesn't amount to a threat to its independence. After all, I've called attention to continuums (or, depending on your view, used the "slippery slope" argument) with respect to both the legality of a trillion dollar coin scheme and its economic consequences. Coin <a href="http://www.federalreserve.gov/releases/h41/Current/">currently counts</a> for $2.1 billion or 0.07% of that $2.9 trillion in Fed assets but what is fundamentally different if that number changes to become closer to the $0.93 trillion currently in MBS? The distinction here is that the current volume of coin reflects the public's demand for it, not the government's. As <i>the Economist</i> <a href="http://www.economist.com/blogs/freeexchange/2013/01/economics-platinum-coin-option">points out</a>, if financial institutions were actually requesting trillion dollar coins to use in private transactions then, yes, the Fed could go along with the scheme while plausibly arguing that it was not just dancing to the government's tune. Note, however, that even if one were to mint a million million dollar coins (something that's more plausible in terms of economic utility than a single trillion dollar coin), <a href="http://www.federalreserve.gov/boarddocs/testimony/2002/20020517/default.htm">in 2002</a> the total coin in circulation was only $32 billion, or 3.2% of a trillion, and the total of both U.S. currency and coin was less than two-thirds of a trillion. Even a tenth of a trillion in additional coinage can't be justified except by admitting that it would have to be handled by the Fed and in order to facilitate Washington's deficit financing.<br />
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The trillion dollar coin scheme is thus unworkable, but it's unworkable because <b>the Federal Reserve Board of Governors will refuse to cooperate</b>. It's not Obama's reputation but Bernanke's that will take this option off the table. If somehow the Fed did go along, investors would become extremely nervous. At a minimum, the Fed chair would feel compelled to spin the stunt as his own idea, applied to a unique circumstance. On its face, yes, a fear that the U.S. will inflate away its debt is less grave than the shock of an outright default by not raising the debt ceiling (one can argue that various personal transfers like social security cheques could just be trimmed instead of any "defaults" but the brake on spending would be so great it would dwarf any "fiscal cliff" concerns to date). But a default would surely never be allowed to happen again, whereas<b> if the Fed steps in to help the Treasury Secretary manufacture a trillion or two out of thin air </b>(or an ounce of platinum)<b> what's to stop that from happening again?</b> The very fact that the consequences wouldn't be so immediately horrific would raise greater fears for the long term.<br />
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UPDATE January 10:<br />
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WIRED has a <a href="http://www.wired.com/business/2013/01/trillion-dollar-coin-inventor/">fuller background</a> on "beowulf" and the origins of the idea. Apparently the blogosphere discussion dates back to May 2010 on <a href="http://moslereconomics.com/2010/05/14/marshalls-latest/">Warren Mosler's blog</a>. <br />
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It's struck me that the best counter to the contention that the Fed would see this coin idea as a challenge to its independence is the fact that the Fed is already on track to have a balance sheet of four trillion by Christmas. One could therefore reasonably argue that the only real issue is the optics of the Fed's desires as opposed to the Fed's desires (unless the Fed is particularly insistent that a large fraction of the money printing continue to support housing as opposed to general government expenditure). By that angle, all the Whitehouse has to do is work behind the scenes to get some Fed people to raise the coin idea and make some public statement indicating that they're open to it. That could both resolve much of the independence concern and make the move an easier sell politically. Now the Fed might object anyway even if it didn't see an independence issue, but in that case their objection would be more like an objection to NGDP targeting that we've often heard from central bankers; that is, that a concern is not just the theory but retaining the confidence and understanding of the general public.</div>
Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-54973833064921387452012-12-14T01:47:00.000-07:002012-12-14T02:25:18.575-07:00Lie of the Year? "$1.5 trillion spending cuts already passed"<div dir="ltr" style="text-align: left;" trbidi="on">
For my undergraduate degree I majored in philosophy, and one of the ideas I picked up then that has stuck with me is that the "<a href="http://en.wikipedia.org/wiki/Coherence_theory_of_truth">coherence</a>" theory of truth has a lot to recommend it. It answers many of the various objections that <a href="http://philosophical%20skepticism/">epistemological skeptics</a> make and that subjectivists make to objectivists while retaining the primacy of logic and rejecting the metaphysical premises behind moral relativism. To oversimplify, you might not agree with someone else's world view, but you still have to keep your own world view coherent, and once it is established that both you and another person both believe in certain basic principles, if you disagree on some derivative matter one of the two of you is more wrong than the other.<br />
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The moral status of abortion may be an example of an issue whereby the level at which disagreement begins is too fundamental for either side to prove the either side to be definitively wrong. There just aren't many commonly held premises, even when drilling down to the metaphysical level. One ends up appealing to a "<a href="http://correspondence%20theory%20of%20truth/">correspondent</a>" theory of truth, i.e. arguing that the other side's beliefs do not correspond to reality. If one person's view of reality happens to be entirely <a href="http://materialism/">materialist</a> (that nothing, not even consciousness, exists apart from matter and energy) while the other is metaphysical <a href="http://en.wikipedia.org/wiki/Dualist">dualist</a>, the disagreement will be pretty fundamental.</div>
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But most debates between "subjectivists" and "objectivists" are over matters of degree within a coherence construct. If the coherence test is applied to such an extent that the "edge" of its applicability circumscribes all of human consciousness, and that metaphysical premise itself forms a common cornerstone, then notions of "subjectivity" drop out as irrelevant, à la Wittgenstein's <a href="http://en.wikipedia.org/wiki/The_beetle_in_a_box#The_Beetle_in_a_box">beetle in a box</a>. There might be another universe out there, but we are living in this one.</div>
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I write this as a preamble to making three comments about the U.S. economic and political debates. Allow me to take as the first example what PolitiFact called the "<a href="http://www.politifact.com/truth-o-meter/article/2012/dec/12/lie-year-2012-Romney-Jeeps-China/">Lie of the Year</a>": the Romney campaign's Jeeps and China ad. <br />
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How effective a criticism of PolitiFact's decision is it to note that every word of the ad is actually true? Presumably not very, since that's held to not be the issue. At the time, Politifact <a href="http://www.politifact.com/truth-o-meter/statements/2012/oct/30/mitt-romney/mitt-romney-obama-chrysler-sold-italians-china-ame/">said</a>, "In this fact check, we examine whether the sale of Chrysler came at the cost of American jobs" <b>instead of examining what the ad actually claimed</b>. According to PolitiFact, the ad "presents the manufacture of Jeeps in China as a threat, rather than an opportunity to sell cars made in China to Chinese consumers." Now that IS true, it is presented as a threat on the basis of the well established economic principle of <a href="http://en.wikipedia.org/wiki/Opportunity_cost">opportunity cost</a> (corporate resources spent on expanding plant in China are resources not spent on expanding plant in the U.S.) but the question is why outsourcing suddenly became an "opportunity" when Politifact treaded lightly on the Obama campaign's many charges that Romney was running to become Outsourcer in Chief. Where is the <i>coherency</i>? Now it's true that Romney could be challenged on his own "coherency" in choosing this line of attack by noting his track record at Bain. <b>But that's actually a charge of hypocrisy, not a truth claim</b>. As Ryan Chittum at the <i>Columbia Journalism Review</i> <a href="http://www.cjr.org/the_audit/bloombergs_role_in_romneys_jee.php">put it</a>:</div>
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[The ad is] saying that Chrysler’s Italian owners “are going to build Jeeps in China.” But happens to be true, even if it was happening before 2009 under its German and private-equity ownership. Cars made overseas by an American company (even one with Italian owners) are cars that won’t be made in the U.S., and it’s fair to say those jobs are outsourced.<br />
On the other hand, it’s high hypocrisy for Romney the free-trader private-equity guy to attack anyone for outsourcing production...</blockquote>
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Glenn Kessler of the Washington Post dodged the fact that what the ad said was true <a href="http://www.washingtonpost.com/blogs/fact-checker/post/4-pinocchios-for-mitt-romneys-misleading-ad-on-chrysler-and-china/2012/10/29/2a153a04-21d7-11e2-ac85-e669876c6a24_blog.html">by declaring that</a> "The series of statements in the ad individually may be technically correct, but the overall message of the ad is clearly misleading." Kessler assigned his most damning designation of Four Pinnochios on this basis, <b>yet he assigned zero to Obama's claim in his second debate with Romney about his communications regarding Benghazi which were only technically correct and technically was not even technically correct</b>. The Columbia Journalism Review was founded by Victor Navasky, who has used his publication <i>The Nation</i> to, amongst other things, argue that Alger Hiss wasn't a spy for Stalin despite the overwhelming evidence to the contrary. The CJR's Chittum nonetheless points out a mitigating factor re the Jeeps and China ad, namely that it started with a Bloomberg story with problematic wording and then was amplified inaccurately <a href="http://washingtonexaminer.com/jeep-an-obama-favorite-looks-to-shift-production-to-china/article/2511703#.UJIMCYWNuvE">by a Washington Examiner blogger</a> (before actually being dialed back in the Romney ad transcript from what the Examiner said). No such mitigating factor exists with respect to Obama's misleading claim in the second debate. Instead of getting "caught up in the liberal echo chamber," Obama's decision to create the impression that he called Benghazi a terrorist attack from Day 1 was a decision to create something, not picking up to forward on a liberal attack line already in circulation. Politfact, of course, also took a pass when it came to rating Obama's remarks, instead seeing the back and forth with Romney at the second debate as an opportunity to mark down Romney, calling his criticism of Obama on the point "<a href="http://www.politifact.com/truth-o-meter/statements/2012/oct/17/mitt-romney/romney-says-obama-waited-14-days-call-libya-attack/">half true</a>." The bottom line here is that <b>it's a mug's game to try and expose "fact checking" bias by pleading the "facts." One has to make an appeal to coherency, not correspondence</b>.</div>
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<a href="http://www.aflcio.org/var/ezflow_site/storage/images/media/aflcio/images/cbppchartresize/706001-1-eng-US/CBPPChartResize_imagelarge.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="260" src="http://www.aflcio.org/var/ezflow_site/storage/images/media/aflcio/images/cbppchartresize/706001-1-eng-US/CBPPChartResize_imagelarge.jpg" width="320" /></a></div>
There are other examples one could go into. Romney's infamous "47%... pay no income tax" remark was taken to task by fact checkers in part because "nearly two-thirds of households that paid no income tax did pay payroll taxes." Yet when it comes to trimming the growth of Social Security benefits, were these benefits paid for by tax revenue? In that case, the payroll taxes are spun as being insurance policy payments or otherwise "earned" benefits; in other words, <b>when the question is whether the 47% are carrying their share of the load, their payroll taxes are deemed to be building up the public pot, but when the question is limiting S.S. payouts, these same contributions are deemed to be building up a private entitlement. </b><br />
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Now the example I meant to talk about today (but which I've taken a while getting to) goes back to my last post about the extent to which U.S. unemployment is cyclical or structural. In the context of the "fiscal cliff" debate the New York Times <a href="http://www.nytimes.com/2012/12/14/opinion/pain-ahead-if-the-us-goes-off-the-fiscal-cliff.html">today claims</a> that "<b>Obama already agreed to more than $1.5 trillion in cuts last year</b>." This $1.5 trillion number comes <a href="http://www.cbpp.org/cms/index.cfm?fa=view&id=3869">courtesy of</a> the Center on Budget and Policy Priorities, however it should be noted that these "cuts" nonetheless still not only allow "discretionary" programs to continue to grow with inflation, they allow for a further $65 billion in spending above and beyond that over the next decade. <b>How do you spin spending that exceeds inflation (and more) as "cuts"? By reaching back to inflated 2010 appropriation levels and using that as the baseline</b>. The 2010 appropriation bills were actually adopted in 2009 when the demand on the social safety net was near its height and when Democrats enjoyed a filibuster-proof majority in the Senate in addition to their majority in the House, except for some special bills in 2010 for disaster assistance, border security, and the Patent and Trademark Office which the CBPP of course also included in order to further inflate its baseline. The CBPP says that the 2010 appropriation "simply reflects the level that Congress deemed appropriate" at the time. Well of course. <b>You could say the same thing about 2007, or 2013</b> (we're already more than than two months into the 2013 fiscal year),<b> but of course then the claim of $1.5 trillion in "cuts" would collapse</b>.<br />
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<a href="http://www.cepr.net/images/stories/blogs/deficits-per-GDP-10-2012.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="http://www.cepr.net/images/stories/blogs/deficits-per-GDP-10-2012.png" width="400" /></a>Now what would be an appropriate baseline? The answer to that is what is most coherent with the view you have taken elsewhere. Dean Baker, for example, has repeatedly <a href="http://www.cepr.net/index.php/blogs/beat-the-press/krugman-uses-misleading-deficit-graph">insisted that</a> the "graph that gives a better picture of the problem of the budget deficit in relation to the economy" is one that calls attention to projected deficits in January 2008 (I've copied his graph here). The blogger Kevin Drum insists on <a href="http://www.motherjones.com/kevin-drum/2012/12/washington-doesnt-have-spending-problem-it-has-healthcare-problem-period">using a graph that he cuts off at 2008</a> in order to argue that "Washington Doesn't Have a Spending Problem." Drum says he cuts off his chart because "numbers in the chart have spiked over the past four years because the recession has temporarily depressed GDP and temporarily increased spending, but that spike will disappear naturally as the economy recovers". Yet Drum <a href="http://www.motherjones.com/kevin-drum/2012/10/when-do-we-get-revenue-half-bowles-simpson">elsewhere</a> tallies up "Discretionary spending cuts already passed in 2011: $1.5 trillion" No "natural disappearance" here, it's "cuts already passed" by Congress! <i>Not </i>passing another disaster relief bill like in 2010 becomes passing a cut. <b> Coherency here would mean tallying up the change in spending since 2008, although that would of course completely undermine the point about all the "cuts" that have occurred. </b><br />
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My last two blogposts about the U.S. prior to this one were about <a href="http://briandell.blogspot.ca/2012/12/the-new-normal-us-economy-already.html">whether the current U.S. economic situation is the "new normal"</a> and <a href="http://briandell.blogspot.ca/2012/11/why-benghazi-matters.html">whether Obama's remarks at the second presidential debate were misleading</a> or not. People can disagree with the former and say that 2007 should be the touchstone, but if so, don't elsewhere start calling a level of federal government spending that was decided in 2009 the appropriate reference point. People can disagree about my negative take on Obama's claim in October about what he said on September 12 by saying his words were narrowly true, but don't elsewhere say that Romney was a liar because while his ad was narrowly true it's what viewers were lead to believe that matters. </div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-49755275744365490602012-12-04T03:53:00.000-07:002012-12-07T16:29:14.313-07:00the new normal: U.S. economy already nearing potential<div dir="ltr" style="text-align: left;" trbidi="on">
The main argument that's been trotted against the "deficit scolds" is that Washington should wait until the U.S. economy has recovered. When will it have recovered? When it is approaching "full employment."<br />
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In economics, "full employment" is a rough synonym for "potential GDP" and it refers to the underlying productive capacity of the economy. Potential GDP is the blue line in the graph below. Although the U.S. emerged from the officially determined recession some time ago (indicated by grey shading), according to Keynesians a large "recessionary gap" or shortfall in the aggregate demand for goods and services in the economy remains, as indicated by the gap between potential GDP and actual GDP (which is given in red):</div>
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<a href="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPPOT,GDPC1&scale=Left,Left&range=Custom,Custom&cosd=1996-01-01,1996-01-01&coed=2017-10-01,2012-07-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Quarterly,Quarterly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_date=2012-12-03,2012-12-03&revision_date=2012-12-03,2012-12-03" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPPOT,GDPC1&scale=Left,Left&range=Custom,Custom&cosd=1996-01-01,1996-01-01&coed=2017-10-01,2012-07-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Quarterly,Quarterly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_date=2012-12-03,2012-12-03&revision_date=2012-12-03,2012-12-03" width="400" /></a></div>
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Although there's no doubt about the red line, just where the blue line should be plotted is less than an exact science. In this case, the blue line is plotted by the Congressional Budget Office or CBO, and what is of particular note here is that the CBO has been repeatedly shifting the line towards the right (i.e. towards the red line), as Brad DeLong <a href="http://delong.typepad.com/sdj/2012/11/the-collapse-of-long-run-potential-gdp-estimates-continues.html">has graphed</a>, to the effect of steadily reducing the demand deficiency. DeLong notes that the CBO has drawn down its potential GDP track by 8.5% since 2007, well in excess of the 2008-2009 contraction, which Dean Baker has pegged at 4%. Here's a graph that has the potential GDP line coming very close to actual GDP:</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9p1AmBxEi7dR9FHYUTdAHhZ0y72YU4zE0Ei3i6fQyJ0d15aJGnHX_k-zu_Wz-e6Bc8cnoZ1EY68QzZXpNbyY45frk7uRLYDlcm6DNz3Rr-LI8snwDj7qXfv1e5DUVkqQluuArIN_H9-sE/s1600/HPtrend.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9p1AmBxEi7dR9FHYUTdAHhZ0y72YU4zE0Ei3i6fQyJ0d15aJGnHX_k-zu_Wz-e6Bc8cnoZ1EY68QzZXpNbyY45frk7uRLYDlcm6DNz3Rr-LI8snwDj7qXfv1e5DUVkqQluuArIN_H9-sE/s400/HPtrend.jpg" width="400" /></a></div>
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This particular graph, which the President of the St Louis Federal Reserve, James Bullard, has <a href="http://research.stlouisfed.org/econ/bullard/pdf/BullardBipartisanPolicyCenter5June2012Final.pdf">been using</a>, has come under a lot of attack by Keynesian economists because it challenges the hypothesis that there is currently a significant output gap. The red dashed line here is generated by using a "Hodrick–Prescott filter," which is named after economists Robert J. Hodrick and Edward C. Prescott, who developed it to separate the "cyclical" element from the "trend" element. Now an HP filter has various limitations, such as working with less information near its end point, but Mark Thoma <a href="http://economistsview.typepad.com/economistsview/2012/07/fed-watch-careful-with-that-hp-filter.html">takes issue</a> with what it says in the middle: "the HP filter reveals a period of substantial above trend growth through the middle of 2008. This should be a red flag for Bullard. If he wants to argue that steady inflation now implies that growth is close to potential, he needs to explain why inflation wasn't skyrocketing in 2005. Or 2006. Or 2007." One could start here by pointing to the fact that Paul Krugman has <a href="http://krugman.blogs.nytimes.com/2009/02/16/output-gaps-and-inflation-ultra-wonkish/">defended the use</a> of data that uses a Hodrick–Prescott filter by arguing that a gap with potential GDP need not be defined exclusively by inflation. Does Thoma believe that because the general consumer price index in Japan rose less than 4% between 1985 and 1989, the Japanese economy was not operating above potential despite real GDP soaring more than 20% during those four years? Isn't there an obvious analogy between Japan's equity and commercial real estate bubble bursting in 1990 and the U.S. residential real estate bubble bursting in 2008? Growth cannot <i>always</i> be below trend, meaning that unless Thoma is going to define a decade as the short term, he needs to acknowledge occasions where it has been above trend.</div>
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Notwithstanding his 2009 use of the IMF's HP filtered data, in July Krugman <a href="http://krugman.blogs.nytimes.com/2012/07/11/filters-and-full-employment-not-wonkish-really/">weighed in</a> on the debate over Bullard's graph to note that back in 1998 he took issue with those who used a HP filter to conclude that Japan's economy was close to potential that year. What Krugman doesn't tell you is that he took issue wrongly, <a href="http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/1998_2_bpea_papers/1998b_bpea_krugman_dominquez_rogoff.pdf">claiming back then</a> that "in retrospect it will seem clear that Japan's 1998 output gap was 8 percent or more... so that demand-side policies to close that gap are of very real importance." In fact the OECD, which marked down Japan's potential growth to 1.6% in 1994 and forecast then that the estimated output gap for Japan in 1997 was, in Krugman's view, "remarkably small: - 1.2 percent," has been vindicated. According to the IMF's model (that would be the very same model Krugman used in 2009 to support his claim about the output gap in the U.S.) Japan's output gap for 1998 was <a href="http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weorept.aspx?sy=1985&ey=2000&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=63&pr1.y=7&c=158&s=NGAP_NPGDP&grp=0&a=">less than two percent</a>. While Krugman argued that Japan was facing a prolonged slump in GDP growth below potential, the IMF correctly interpreted Japan’s lost decade as a slowdown in potential. I might add here that the IMF <a href="http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weorept.aspx?pr.x=85&pr.y=9&sy=1996&ey=2017&scsm=1&ssd=1&sort=country&ds=.&br=1&c=111&s=NGAP_NPGDP&grp=0&a=">also says</a> that the U.S. had an "inflationary gap" (that is, a negative output gap) over 1% in 2005, 2006, and 2007. Despite having wrongly prescribed aggressive "demand-side policies" for Japan in 1998, Krugman is currently pounding the drum for them to be applied in the U.S. in 2013. </div>
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Ironically, Krugman exhibited a moment of worry <a href="http://krugman.blogs.nytimes.com/2008/02/07/sultan-of-smooth/">in February 2008</a>, noting that a HP filtered graph of productivity was flashing warning signs. Productivity is a key component of potential GDP, meaning that he saw back then an explanatory factor for the U.S. economy's low growth that wasn't coming from the demand side. Here is a graph of the year-over-year change in potential GDP as measured by the CBO:</div>
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<a href="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPPOT&scale=Left&range=Custom&cosd=1996-01-01&coed=2020-10-31&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=pc1&vintage_date=2012-12-04&revision_date=2012-12-04" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPPOT&scale=Left&range=Custom&cosd=1996-01-01&coed=2020-10-31&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=pc1&vintage_date=2012-12-04&revision_date=2012-12-04" width="400" /></a></div>
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Note the slump from 2000 to 2011. The CBO optimistically believes the trend will reverse this decade, but if it doesn't, the CBO will continue to shrink its projected output gap by ratcheting down its potential GDP projections.</div>
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There are a variety of other metrics that one can point to that are inconsistent with the thesis that there is a large output gap, including the fact that inflation is running at 2%, pretty much right on the average since the late 1990s, the employment cost index (wages and benefits) is rising, and U.S. capacity utilization has recovered to pre-crisis levels. </div>
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But a Canadian now working for the St Louis Fed, David Andolfatto, makes a particularly compelling argument for deeming current U.S. unemployment structural as opposed to cyclical:</div>
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<a href="http://research.stlouisfed.org/fred2/graph/fredgraph.png?recession_bars=Off&id=CANURNAA,UNRATE&scale=Left,Left&range=Max,Custom&cosd=1970-01-01,1970-01-01&coed=2011-01-01,2011-01-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Annual,Monthly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_date=2012-12-04,2012-12-04&revision_date=2012-12-04,2012-12-04" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://research.stlouisfed.org/fred2/graph/fredgraph.png?recession_bars=Off&id=CANURNAA,UNRATE&scale=Left,Left&range=Max,Custom&cosd=1970-01-01,1970-01-01&coed=2011-01-01,2011-01-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Annual,Monthly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_date=2012-12-04,2012-12-04&revision_date=2012-12-04,2012-12-04" width="400" /></a></div>
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The Canadian unemployment rate is is blue, the U.S. rate in red. Throughout the 80s and 90s, Canada's unemployment rate was consistently higher. Although the Canadian unemployment rate rose around the 2001/2002 recession and again in 2008/2009, the rise was smaller than in the U.S., and Canada reformed its unemployment insurance program in the 90s, restricting benefits. If it took Canada three decades to move in front of the U.S., why should we believe the U.S. will quickly reduce its unemployment to Canadian levels? It's more likely that most of the "business cycle" adjustment has already occurred, such that remaining adjustment is subject to long term processes.</div>
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This brings us to yet another string of arguments, namely those advanced by Casey Mulligan. Mulligan goes beyond the fact that the share of 25 to 54-year-old non-college educated men in the work force has <a href="http://www.nationaljournal.com/next-economy/the-no-good-very-bad-outlook-for-the-working-class-american-man-20121205">trended down for decades</a> to note how U.S. policy has encouraged <a href="http://caseymulligan.blogspot.ca/2012/11/recession-by-redistribution.html">non-participation in the labour force</a> in recent years by easing eligibility rules for unemployment insurance, increasing the generosity of food stamps, etc:</div>
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<blockquote class="tr_bq">
The American Recovery and Reinvestment Act, popularly known as the stimulus, gave unemployment insurance recipients a weekly bonus, and offered to pay for the majority of their health insurance expenses. FDIC and Treasury reduced some “unaffordable” mortgage payments, which means that successful people need not apply. The list goes on and on.<br />
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The essential consequence for all of these is the same: a reduction in the reward to activities and efforts that raise incomes.</blockquote>
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Dean Baker and Paul Krugman have occasionally taken issue with Mulligan, although Krugman frequently suggests that he considers Mulligan <a href="http://krugman.blogs.nytimes.com/2011/05/04/why-casey-cant-read/">too much his inferior</a> to engage. At one point Krugman <a href="http://krugman.blogs.nytimes.com/2011/08/18/lake-wobegon-economics/">says</a> "Mulligan and others keep emphasizing examples of individual groups that have managed to gain jobs by cutting wages or offering other attractions to would-be employers." Why is this inconsistent with Keynes? Because Keynes' was of the view that if you increased the skill level of all the unemployed in the economy in one swoop or reduced the wage cost to the employer of hiring them, this wouldn't reduce unemployment when there be an output gap because the problem is not with the supply of labour but on the demand side. Krugman's reply is that a sub-group that reduces its unemployment says nothing about whether the whole group ("all unemployed in the economy") could realize the same success. Everybody can't be an above-average potential hire, observes the Krugman. I don't find this at all convincing, however. Krugman ought to be be chastising Dean Baker instead of citing him if he were consistent. Why? Because Dean Baker's #1 policy prescription after the economy has returned to potential is a lower U.S. dollar. I should think it would be obvious that not every country can depreciate its currency at the same time. At issue here is the international competitiveness of the United States; if a particular group in the U.S. can take actions that improve its employability the Keynesians need to explain why it wouldn't work for the entire country to take a similar action. </div>
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To be sure, I think Mulligan goes too far when he seems to suggest on occasion that the cause of the recession is to be found on the supply side. But that's not the question at issue here on the doorstep of 2013.<br />
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UPDATE December 6:<br />
Job vacancies continue to rise:<br />
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<a href="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=JTSJOR&scale=Left&range=Max&cosd=2000-12-01&coed=2012-09-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Monthly&fam=avg&fgst=lin&transformation=lin&vintage_date=2012-12-06&revision_date=2012-12-06" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=JTSJOR&scale=Left&range=Max&cosd=2000-12-01&coed=2012-09-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Monthly&fam=avg&fgst=lin&transformation=lin&vintage_date=2012-12-06&revision_date=2012-12-06" width="400" /></a></div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-59468294463890599472012-11-26T02:45:00.001-07:002012-11-26T15:15:50.143-07:00Wildrose 2013<div dir="ltr" style="text-align: left;" trbidi="on">
For the past few years, I've given a run down of what I found noteworthy at the provincial party's AGM. That won't be happening this year, because I didn't go. I can, however, comment based on what I've seen reported. Since this post is directed at current Wildrosers, I will be calling attention to some local constituency details that won't be of interest to a wider readership, and I'll be stepping back into my old shoes as a party activist to speak to social conservatives from an "us" perspective, issues I wouldn't say I've since "evolved" on but I would say would require more discussion of what things look like from the libertarian perspective were I addressing a broader audience.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX_XIRn4H6cC3vOHpI2vCXLWJm0h5ZN19FAvVPBTL9nb6B90FN33sI35zYXVUazcupvk5GrRCYcuiGpJrCFoksflQMd_cikoMtKtyjDXFipry8sYOLbjbZ3wtWsChRCI7zbtqJmFuzvBkF/s1600/wildrose.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX_XIRn4H6cC3vOHpI2vCXLWJm0h5ZN19FAvVPBTL9nb6B90FN33sI35zYXVUazcupvk5GrRCYcuiGpJrCFoksflQMd_cikoMtKtyjDXFipry8sYOLbjbZ3wtWsChRCI7zbtqJmFuzvBkF/s1600/wildrose.jpg" /></a>First of all, I'll note that there seems to be a continuation of the mentality I took exception to at previous AGMs, namely, that the party's MLAs in particular seem to be of view that the party's popularity challenges are best overcome by making <b>policy concessions as opposed to advocating for the party's policies more effectively</b>. <br />
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The best example of this is <i>not</i> "conscience rights" since there is little room to advocate more effectively and convincingly on life issues. Most people are already informed enough in that area to make a decision, rightly or wrongly, and it's a decision that is typically based upon an ingrained world view. However, even here it could be pointed out to the media that anti-abortion and anti-gay marriage planks have been shot down continually by the party membership ever since "Wildrose" was first attached to a provincial political party name more than five years ago. All that's left today is a plank that is consistent with a pluralistic society wherein a significant minority does not support either abortion on demand or state-approved gay marriage.. In theory, access to abortion or a marriage certificate could be constrained by finding that one's first point of contact is declining to offer the service. But <b>if my local medi-centre declines to perform brain surgery on me and I end up having to head down to the university hospital, have I been really been denied access to this surgery</b>? In a free society, coercion is a last resort and if someone is modestly inconvenienced by someone's freedom to decline a service, that may seen as a reflection of the fact that it's one thing for a society to come to a conclusion about a contentious issue and another to coerce conscientious objectors into helping implement that conclusion. Surely the manpower of the dissidents is not necessary if community consensus is in fact so decisive. The real problem for those requesting the service is not the inconvenience of moving on to the next provider but the audacity of the refusant to not recognize their entitlement. If we can tolerate cops declining to ticket someone even though the letter of the law calls for a ticket, I should think we could allow some room for other representatives of the state to exercise their personal judgement.<br />
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But if the "conscience rights" clause must go nonetheless, the party would still have a <i>raison d'être</i> without it, even just on social conservative grounds (properly construed). I've long been of the view that <b>narrowing one's advocacy down to a pro-life agenda often ends up undermining the larger conservative social agenda</b>, because, to take an example, it may end up increasing out-of-wedlock births instead of decreasing them. I understand that the ends don't necessarily justify the means, but if one person is trying to get a guy to take more responsibility for his partner and his children and another is trying to convince him of the need to obey Levitical prescriptions concerning the eating of pork, do we decide which person we should ask to stop talking over the other so a single, less confusing message can get through based solely on who makes more references to Scripture? I'm not trying to trivialize abortion by talking about clean and unclean food, I'm rather noting that not everything in the Bible is treated, or can be treated, as a litmus test. What matters is whether the candidate's approach to public policy will advance or retard God's will for the family and society. It's not impossible that an atheist could be used by the Lord. Once a particular theological point assumes dealbreaker status, where you do you stop? We saw the logical conclusion of how the issue plays out politically south of the border when GOP Senate candidates Richard Mourdock of Indiana and Todd Akin of Missouri were pressed on how far they would go in their opposition to abortion. With respect to <b>gay marriage</b> my primary objection has been to the characterization of the matter as a "rights" issue when such characterization ought to be reserved for a call for the state to step out, not for a call for the state to step in. And a "step in" is indeed the issue here because the issue is not striking sodomy laws off the books but recognition of gay marriage as a social norm. It's the <b>difference between the freedom to deviate and whether it's deemed deviant in the first place</b>. There's a fundamental difference between approving gay marriage via the legislature or by referendum, in other words, and approving it via courts citing "rights." Once democratic support for gay marriage has been established, that may make no difference in terms of its rightness theologically or metaphysically, but it does make a difference in terms of the return one is going to get on one's political advocacy going forward. I am not so much saying that social conservatives need to move on from the issue so much as I am saying that <b>social conservatives need to look at advocacy holistically and the breakdown of the nuclear family in particular is an issue that not only provides more fertile ground for moving public opinion but has consequences that do not presume a particular metaphysical view to be identified as negative</b>. Even atheists can lament the number of single parent households.<br />
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<a href="http://www.chumirethicsfoundation.ca/files/graphics/SheldonSC1.gif" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://www.chumirethicsfoundation.ca/files/graphics/SheldonSC1.gif" /></a><br />
So if abortion and gay marriage are not the best examples of where the party should dig in and just fight harder, how about the <b>human rights commission</b> plank? I'll repeat here <a href="http://briandell.blogspot.ca/2010/07/wildrose-agm-review-part-5-caucus.html">what I said</a> after the 2010 AGM:<br />
<blockquote class="tr_bq">
The question for me, however, was why there was any need to finesse this policy plank when even the Sheldon Chumir Foundation for Ethics in Leadership, which draws its name from a former Liberal MLA [photo at right from Foundation website], <a href="http://www.chumirethicsfoundation.ca/files/pdf/s.3_ABPressCouncil_060609_ds.pdf">thinks</a> a simple repeal of section 3 acceptable.</blockquote>
<b>Here we have the best illustration of why the call by party poohbahs to move closer to the "centre line" represents a lack of creative thinking</b>. On abortion, OK, the lines have been set for a long time; - if someone had an idea about how to bust open that issue to new movement in public opinion, someone would have surely thought of it by now. But this human rights commission issue is highly susceptible to framing. <b>The left has been dragging the centre line their way for a while now and the current situation calls for yanking on the other end of the rope, not capitulation</b>. The spectrum here consists of the left, the libertarians, and the conservatives. On this matter it's already been dragged well into libertarian territory such that current policy can be, and should be, entirely defended on free speech grounds. I call attention here, again, to the fact that Janet Keeping, president of the Sheldon Chumir Foundation, <a href="http://www2.canada.com/montrealgazette/features/viewpoints/story.html?id=eb518542-a2d3-48d8-a678-776a3195587d">took exception</a> to how this issue has been framed:<br />
<blockquote class="tr_bq">
Here's one that especially rankles. The Alberta legislature recently confirmed the provincial commission's jurisdiction over offensive speech, but [chief commissioner of the Canadian Human Rights Commission, Jennifer] Lynch notes "not without a chorus of 'boos' from the far right." The Chumir Foundation, other organizations and individuals presented carefully constructed arguments against Alberta's hate-speech provision. It is disrespectful to dismiss our reasoned objections as "boos"...</blockquote>
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Our most prolific provincial pundit, David Climenhaga, <a href="http://albertadiary.ca/2012/11/wildrose-leader-to-albertans-youre-gullible-and-stupid.html">is of the view</a> that it wasn't a "couple of candidates mak[ing] controversial comments" that brought Wildrose up short in April's election but "Wildrose policy". Aside from the fact that Mr Climenhaga's thesis isn't supported by the polls ( it wasn't previously undisclosed policy that grabbed headlines late in the campaign but "comments") it requires far less reaching to contend that <b>what voters took issue with was not the fact that Edmonton South West candidate Allan Hunsperger wasn't legally prosecuted by the human rights commission for referring to the "lake of fire", it's that he was a <i>party candidate</i></b>. I assure you, dear reader, that "lake of fire" does not appear in the party's policy platform. It's one thing for the party to defend Hunsperger's right to free speech as a private citizen and another to make him a potential legislator in a Wildrose government.<br />
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<a href="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRIptpVext4bqZFDjERg6tVremP7JLEKlNoypMo5pGJ897QQeM7tGC4ZP4b" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRIptpVext4bqZFDjERg6tVremP7JLEKlNoypMo5pGJ897QQeM7tGC4ZP4b" /></a>Tom Flanagan [photo at right from <i>peacealliancewinnipeg.ca</i>] says Wildrose should have been spent more money on oppo research, digging into the background of both Wildrose candidates and PC candidates. Is it not a little odd that a prescription to spend more money is coming from someone seen as a conservative ideologue? Is it not oddly ironic that someone with such a (well deserved, in my view) reputation for cynical, hardball politics, ended up the lamb before the lion of the PC's political attack machine? <b>Flanagan repeats the call for softening the party's policy book, when in fact it was the party's campaign tactics that were the problem, and if anything the tactics weren't hardball enough, substituting shrillness and sheer volume for sophistication in its criticisms of the governing party</b>. The idea of paying out energy revenue directly to Albertans didn't come from the policy book, or the grassroots, anyway. This was entirely a creation of the head office brain trust. One of the biggest arguments for conservative taxation and spending policies is that incentives matter and should be rewarded. Paying out unconditional cheques for simply existing does pretty much zero in terms of creating additional incentives to work or otherwise add value to the economy. Consigning entitlement schemes like this to the dust bin, in other words, would move policy to the right, not left. <b>The problem with the policy book is not that it is too right wing but that it isn't smart and innovative enough.</b><br />
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<blockquote class="tr_bq">
From:<span class="Apple-tab-span" style="white-space: pre;"> </span> Brian Dell<br />
To:<span class="Apple-tab-span" style="white-space: pre;"> </span> Wildrose VP Policy<br />
Date:<span class="Apple-tab-span" style="white-space: pre;"> </span> Tue, Nov 17, 2009<br />
subject:<span class="Apple-tab-span" style="white-space: pre;"> </span> Re: Making Policy<br />
<i>"We cannot simply call on... people that do not have a connection to us..."</i><br />
Now where's that "can do" attitude, [...]? If say, getting someone from the U of C's School of Public Policy to speak to the membership about trends in tax reform or an Edmonton-based academic economist to provide input to a policy task force is truly mission impossible, why not suggest to the policy committee that they consider and come to a consensus about whether to give me, or anyone with a public policy background, authorization to try and make it happen? After all, I would only be failing where others have failed before, no? Just be sure to have that Mission Impossible theme music in the background! ;) If it is a requirement that the invited person be sufficiently "connected", just get specific about that in the mission details. I don't think a "connection" of comparable strength to whatever the connection was that brought someone to speak to the membership twice this year about privatizing healthcare would be impossible to find or create.<br />
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I think you've struck upon precisely what I see as the issue, namely, that the people that have a "connection" to "us" are Calgarians, media people, oil patch lobbyists, or all of the above. We can either move beyond that, or we can take that attitude that we can't build new "connections"....</blockquote>
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For all of my frustrations about policy, I might have been able to deal with it, had it not also been for other factors including what seemed to me to be a shortage of professionalism when it came to local organization. <b>I lobbied for the early creation of a southwest Edmonton constituency association</b> that I and others could work with in anticipation of Edmonton Whitemud's split and I couldn't find any takers<b> at the stage when the association could have avoided ending up a runt</b>.<b> This brings us back to Hunsperger, the party's ultimate nominee for the new riding of Edmonton South West</b>. <a href="http://www.edmontonjournal.com/sports/Smith+pledges+that+Wildrose+will+more+careful+selecting/7606280/story.html">According to</a> the Journal, "[Danielle] Smith repeated her stance that it was largely up to local constituencies to weed out problematic nominees." But of course. This means, however, having a developed local constituency association early in the game.<br />
<br />
<blockquote class="tr_bq">
From:<span class="Apple-tab-span" style="white-space: pre;"> </span> Brian Dell<br />
To:<span class="Apple-tab-span" style="white-space: pre;"> </span> [select local riding people from the southern part of Edmonton Whitemud]<br />
Date:<span class="Apple-tab-span" style="white-space: pre;"> </span> Tue, Nov 24, 2009<br />
Subject:<span class="Apple-tab-span" style="white-space: pre;"> </span> <i>anticipated division of the Edmonton Whitemud provincial constituency</i><br />
I'm Brian Dell with the Wildrose Alliance. I may have left a message for you or sent you an email in recent weeks.<br />
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The Alberta Electoral Boundaries Commission is scheduled to release their preliminary report with respect to redrawing the province's ridings in late February. Public hearings will be held in April, and a final report presented to the Legislature in July for the Assembly to consider and enact as law.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiigubjQI-y8ZJZPv-H-34msTXBp3rJQ5a5jcxAioU-ycRpjgz6d-4chTnpq8bYekt49vwy1B4YKltkpEntEzoQCNR7SQHpf5kFVFTEyXzsSB1wkgYPtyEJDqp2hyphenhyphenGLIWqBXwg31-6h6MB/s1600/Edmonton+Whitemud+alternative+division.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiigubjQI-y8ZJZPv-H-34msTXBp3rJQ5a5jcxAioU-ycRpjgz6d-4chTnpq8bYekt49vwy1B4YKltkpEntEzoQCNR7SQHpf5kFVFTEyXzsSB1wkgYPtyEJDqp2hyphenhyphenGLIWqBXwg31-6h6MB/s200/Edmonton+Whitemud+alternative+division.jpg" width="170" /></a></div>
During preliminary hearings last September it was apparent that of the 4 ridings to be added to the province (for a new total of 87), at least 1 would be going to Edmonton and the #1 priority for placing this new riding would be Edmonton's southwest; - the Whitemud riding is currently the most overpopulated riding in Edmonton and one of the 2 or 3 most overpopulated in the province.<br />
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It follows that the chances of you gentlemen... remaining in the same constituency as those up in Brookside or Rhatigan Ridge is close to nil.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhQ_0uViSr8lv75maUe-HbMyrO3VvvFEkDxCR4TBlP5t1vl_XD9KvHtunvTOBQa7AJZviy8x3omFywMRv5sgeQ43R3z-z8uERbCshD_nC8OA6KgYKBa-DAQnoffOYbJwi_i8JDUC5ojWhs/s1600/Edmonton+Whitemud+redrawing+Yurkovich+proposal.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhQ_0uViSr8lv75maUe-HbMyrO3VvvFEkDxCR4TBlP5t1vl_XD9KvHtunvTOBQa7AJZviy8x3omFywMRv5sgeQ43R3z-z8uERbCshD_nC8OA6KgYKBa-DAQnoffOYbJwi_i8JDUC5ojWhs/s200/Edmonton+Whitemud+redrawing+Yurkovich+proposal.jpg" width="190" /></a></div>
The two main proposals under consideration would either divide the constituency more or less east-west (as proposed by Edmonton's PC Party VP) or north-south. See attached maps....<br />
...the south of the riding will likely be in need of another individual or two who could be called on to form a nucleus for the new constituency in the south and east of Edmonton Whitemud.<br />
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... If you are interested in helping guide the development and success of the Wildrose Alliance in southwest Edmonton generally we encourage you to stand for a position as soon as possible on the executive to be established...<br />
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By meeting each other... we could become briefly acquainted and could have something of a game plan for avoiding the scenario whereby only 1 or 2 people from the south volunteer to serve on the [Edmonton Whitemud CA] executive or the south's representatives consist of self-promoters and/or oddballs who popped up out of the weeds.</blockquote>
<br />
<blockquote class="tr_bq">
From:<span class="Apple-tab-span" style="white-space: pre;"> </span> Brian Dell<br />
To:<span class="Apple-tab-span" style="white-space: pre;"> </span> Eleanor Maroes<br />
cc: [Edmonton Whitemud CA Assoc]<br />
Date:<span class="Apple-tab-span" style="white-space: pre;"> </span> Wed, Dec 2, 2009<br />
Subject:<span class="Apple-tab-span" style="white-space: pre;"> </span><i> a modest proposal re Edmonton Whitemud</i><br />
Could we perhaps constitute the board with northern people and then just have it understood that the south is in development? The idea here is that the north continues without so much as a hiccup post-split because it is the heir of the pre-split riding while the south formally launches upon the split, with people expected to be on the southern board having been meeting separately on an unofficial basis prior to the official division. The south could conduct its own fundraising, general meetings, etc and have its own bank account. For Elections Alberta purposes it would not be an official constituency bank account, of course, but that should not matter to the bank.<br />
...The reality is that the south of the riding is going to be more of a challenge developmentally and I think southerners will be confident that there will be no conflicts of interest with respect to that development by having southerners handling it from day 1. </blockquote>
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<blockquote class="tr_bq">
From:<span class="Apple-tab-span" style="white-space: pre;"> </span> Brian Dell<br />
To:<span class="Apple-tab-span" style="white-space: pre;"> </span> Link Byfield<br />
Date:<span class="Apple-tab-span" style="white-space: pre;"> </span> Sat, Dec 5, 2009<br />
Subject:<span class="Apple-tab-span" style="white-space: pre;"> </span><i> Fwd: Wildrose Alliance - Edmonton Leaders SAT DEC 1</i><br />
...you may end up hearing on the grapevine that my view of the success of Edmonton Whitemud's founding deteriorated within a day or two of my talking to you on the phone and [X] and I are a little at odds over what happened.<br />
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Fact is, me and another organizer took to facilitating board nominations like we were a recruiting committee for a corporation, meaning skill sets and where vacancies existed in the board mattered and personal relationships didn't matter, [X]'s friend went and surprised us by nominating directly or indirectly about half a dozen people she was friends with and sit on James Rajotte's federal board. There was a glaring omission in the minutes released after I talked to you that suggested that not only did this group not cooperate with the idea of ensuring representation from the south of the riding, the one southerner who nominated (another southerner) had his nomination fail to appear in the minutes. I in turn ended up nominating this nominator because he was a month-long organizer who even went down to Calgary on the 29th but only when forced to because no one else would, and he later said that he wasn't surprised because for weeks now it was apparent that [X]'s friends were not interested in his input (or mine, in my view). So he's actually quit the board before it even got started, costing us our most motivated volunteer in the riding.<br />
...<br />
This compromises the viabiltiy of the new southern Whitemud riding post-split and, re the "triage" argument, the polls here went 58.8% PC in 2008, which in my amateur strategizing indicates an area that should not be written off as unwinnable [especially with no PC incumbent].</blockquote>
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<blockquote class="tr_bq">
From:<span class="Apple-tab-span" style="white-space: pre;"> </span> Brian Dell<br />
To:<span class="Apple-tab-span" style="white-space: pre;"> </span> Eleanor Maroes<br />
cc:<span class="Apple-tab-span" style="white-space: pre;"> </span> Jane Morgan<br />
date:<span class="Apple-tab-span" style="white-space: pre;"> </span> Mon, Dec 7, 2009<br />
subject:<span class="Apple-tab-span" style="white-space: pre;"> </span> <i>Re: comments</i><br />
<i>"Creating division at this point is not helpful to getting a strong CA executive."</i><br />
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WE ALREADY HAVE A DIVISION! Sorry for the caps but in my opinion I was as accommodating as possible until the minutes came out and somebody resigned as a consequence. ...The message that his input would be routinely ignored could not have been clearer. By proposing a division I am proposing a mechanism to keep this asset ("[Y]") engaged. Now maybe he is a liability we are better off without. But if that's the case I would like to see an argument since we are very short volunteers from the southern part of Edmonton Whitemud as it is. And I have already received a complaint to the effect of why raise money in the south if the money is going to end up in a bank account controlled by northerners. I am reacting to the division here and am trying to figure out a way to make the best of it. ...</blockquote>
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The point of the above is to note that just "calling on local constituency associations to ask tough questions of anyone running to be a nominee in 2016" isn't going to cut it. The local CAs have to be both able and willing to ask those "tough questions" and if they are not, vetoing the CA nominee treats the symptom, not the disease. Is it going to go like this?<br />
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<i>Local CA player #1</i>: Danielle says our nominee is unacceptable! Apparently they were suspicious that a person who has spent most of his adult life lobbying for home schooling might have said something eyebrow raising about the insidious corruptions of secular society at some point and apparently HQ indeed ended up finding something problematic.<br />
<i>Local CA player #2</i>: No complaints here! Nothing undemocratic about that! Both we and the nominee himself are going to just nod and sit back down.<br />
<i>Local CA player #3</i>: So else do we nominate?<br />
<i>Local CA player #2</i>: How about approaching that business owner, you know, the one that's prominent in the community? That lady who also sits on the hospital board?<br />
<i>Local CA player #1</i>: Of course, that's why we passed her over the first time! Because that was just a practice run!</blockquote>
<b>A problem CA is going to nominate a problem candidate.</b> <b> </b>Head office has to get involved in local CA politics by ensuring that every CA has a minimum number of volunteers and money. The strategy of focusing resources on "winnable" ridings can be unraveled by having a fringe candidate emerge out of neglected riding. You can't hide that person's record and trying to hide the policy book instead just creates suspicions about your agenda. <b>Stop apologizing for the policy book and get your hands dirty by intervening in local constituency politics</b>. <i>Of course</i> a group of friends is going to nominate each other to the board and then nominate one of their own to be the candidate! Rubber stamping that sort of thing is respecting the local cabal, not the local grassroots. If there's a controversy in the local CA the party needs to step in and adjudicate, and adjudicate with an eye to whether the procedure that was followed was appropriate, not whether it was followed or not. It's easy to argue that you've followed the local rules when you're the one who made them up. <br />
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I might add that even if the Edmonton South West CA was a gong show, all head office had to do was ask me to throw my hat in the ring and I would have rigorously contested the nomination (if the nomination period was open more than just a few days) and I would have pointed to Hunsperger's blog, even if it was just to a tiny crowd at the nomination meeting. I'm a graduate of Briercrest Bible College and accordingly wouldn't accept any Wildroser's contention that I was attacking Hunsperger because he's a believer. "Lake of fire" may be biblical, but Hunsperger's view that public education is inherently evil is not part of the evangelical mainstream, never mind the secular mainstream. Ethics Commissioner Neil Wilkinson once wrote to the Legislature Offices Committee requesting authorization for his office to post MLA financial disclosure statements on internet and the PC members on the committee said no. That didn't stop me from physically going down to the Leg Annex to take a look at Dave Hancock's file, and I didn't bill Flanagan for doing oppo research. All of this stuff is just a matter of <b>making use of your motivated volunteers</b>.<br />
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To anyone concerned about my quoting from email exchanges, you needn't worry about me not respecting expectations of privacy. What I've repeated here is what I've wrote, except for a few phrases the attribution of which I've left ambiguous. I'll repeat the most important bit that I said in those emails again: "<b>me and another organizer [sic] took to facilitating board nominations like we were a recruiting committee for a corporation, meaning skill sets and where vacancies existed in the board mattered and personal relationships didn't matter</b>." I didn't feel that head office was going to back up those of us who had this view by intervening in CAs to ensure that that principle was followed, and so it was that I was essentially on my way out the door at that point. If the party's floor crossing MLAs are too scared of special interests like the teachers' unions, perhaps their influence could be diluted by electing some longer serving party members. But that requires professionalization of the how the constituency associations are staffed, as these CAs in turn "staff" the candidate slate, and it didn't appear that that was going to happen. Would I do what I did again if I had the chance? I'm not entirely sure about that because I alienated a lot of people by complaining to anyone that would listen that there was too much nepotism going on at the constituency level. A person may consider himself a righteous crusader or whistle blower when reality he's just a pain in the buttinski!<br />
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-51962311561243450852012-11-19T04:42:00.000-07:002012-11-23T13:02:08.447-07:00Why Benghazi matters<div dir="ltr" style="text-align: left;" trbidi="on">
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On September 26, Eli Lake's <a href="http://www.thedailybeast.com/articles/2012/09/26/u-s-officials-knew-libya-attacks-were-work-of-al-qaeda-affiliates.html">article</a>, <i>U.S. Officials Knew Libya Attacks Were Work of Al Qaeda Affiliates within 24 hours</i> appeared on the <i>Daily Beast</i>. In the graph below of RCP's polling average from September 1 to election day, September 26 is highlighted:</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4AixliBD_xPM-VR6QQkighgDoLr1La34O1tDHK8k8TEQV5ORuAgW-y4k9xP7mTDdT-S2I2jOGGffD9C55srd8dE4yHj94FcSHecz-sFc-ECbLYSwnIoV6pQutNW0VX-7H6V1JCwH0rYnk/s1600/RCPpolls.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="252" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4AixliBD_xPM-VR6QQkighgDoLr1La34O1tDHK8k8TEQV5ORuAgW-y4k9xP7mTDdT-S2I2jOGGffD9C55srd8dE4yHj94FcSHecz-sFc-ECbLYSwnIoV6pQutNW0VX-7H6V1JCwH0rYnk/s400/RCPpolls.jpg" width="400" /></a></div>
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Was Lake's article a poll mover? Maybe! Obviously, the first presidential debate is what gave serious momentum to whatever gains Romney started to make in the week before that October 3 debate. The conventional wisdom is that after a summer of attack ads that defined Romney negatively, seeing Romney "unspun" on millions of TVs provoked a popular reassessment. That's a thesis I'd agree with, however as an aside I'd ask a question here that I haven't seen asked, and that's where was the media? The Obama campaign's "<a href="http://www.youtube.com/watch?v=Mgiuq2uR6LA">not one of us</a>" ads created a caricature, but isn't it the media's job to create an accurate one?</div>
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If there was systemic media bias against Romney, Romney nonetheless had another chance to move the polls at the second debate. Should he fail to do so, he'd be out of catalysts, because the third debate offered little opportunity, designated as it was a foreign policy debate coming at a time when the great majority was quite comfortable with the incumbent's foreign policy.</div>
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<b>Just prior to the second debate was Obama's most precarious moment</b> in the months-long campaign. Democrat partisans at the <i>Daily Kos</i> complained of feeling "sick to [their] stomach," such were the stakes. Having been widely panned for being too passive in the first debate, Obama was expected to come out swinging. But how to go on offence with regard to the inevitable question about Benghazi?</div>
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With respect to what happened in Benghazi, Libya on September 11, you see, the administration's ongoing efforts to manage the message had hit a snag. Normally, the objective truth doesn't matter. It exerts a magnetic force on the media, but the administration exerts its own magnetic force. It's like walking a dog without a leash, whereby it's the relative distance to the dog that is of concern from the administration's view. You get the media to run with you, but if the media stubbornly insists on going its own way, you reluctantly run with them, in an ongoing dynamic. Here, there were concerns that later developed into a very specific question, to whit, <a href="http://hosted2.ap.org/OREUG/topstories/Article_2012-11-16-Libya%20Attack/id-862186f7c2f2421e88d77dc4d7f86563">why</a> "security at the consulate was so lax that protesters literally walked in and set fire to the facility" when </div>
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<li>an <a href="http://www.foxnews.com/politics/2012/10/31/exclusive-us-memo-warned-libya-consulate-couldnt-withstand-coordinated-attack/">August 15 cable</a> to Hillary said "RSO (Regional Security Officer) expressed concerns with the ability to defend Post in the event of a coordinated attack"</li>
<li>in the weeks before his death, Ambassador Stevens sent the State Department <a href="http://www.cbsnews.com/8301-18563_162-57536524/before-death-amb-stevens-warned-of-violent-libya-landscape/">several requests</a> for increased security for diplomats in Libya</li>
<li>there had been <a href="http://oversight.house.gov/wp-content/uploads/2012/10/10.2.12-Issa-Chaffetz-to-Clinton.pdf">repeated attacks</a> on western targets in Benghazi over the summer, including an IED explosion on that very same U.S. diplomatic mission on June 6 and a RPG attack on the British ambassador's motorcade on June 11</li>
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The dog was off the leash, running back to an earlier point in time and obsessed with digging into what it smelled there, and couldn't be coaxed to come back. The administration then tiptoed back to the site of the digging as one would expect, but what to do about the footprints left behind?<br />
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Obama ended up deciding to try and cover the tracks in a high stakes gamble, by insisting that he had been at the same site all along. You see, Obama had been dropping "restore points" along the way, for possible future use in narrative reversal. If you find "restore points" dubious, you can just call it political speech that is deliberately ambiguous in order to allow for multiple narratives. Politicians do this all the time, but they don't jump tracks back to another "forgotten" narrative like Obama later did here.</div>
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<a href="http://upload.wikimedia.org/wikipedia/commons/7/7e/Susan_Rice,_official_State_Dept_photo_portrait,_2009.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" src="http://upload.wikimedia.org/wikipedia/commons/7/7e/Susan_Rice,_official_State_Dept_photo_portrait,_2009.jpg" width="160" /></a>Had the ambassador perished accidentally in a protest that got out of hand, it'd just a bad news item. You can only anticipate a "spontaneous" development so far. But as Susan "give the finger to Richard Holbrooke" Rice so <a href="http://www.cbsnews.com/8301-3460_162-57513819/face-the-nation-transcripts-september-16-2012-libyan-pres-magariaf-amb-rice-and-sen-mccain/?pageNum=2">boldly stated</a> on September 16, the administration line was "<b>We've decimated al Qaeda</b>," such that a successful al Qaeda take-out of a sitting ambassador in the midst of an election campaign would have been "off message." </div>
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But immediately or even during the Benghazi attacks, it was brought to Obama's attention that it might not be possible to just blame an American (uploading videos to Youtube) for what happened. So at 4:17 of <a href="http://www.youtube.com/watch?v=3Nu6VZ9DeVc">this clip</a> of his 10:43 am September 12 Rose Garden remarks, Obama placed his "restore point" with the statement, "[n]o <b>acts</b> of terror will ever shake the resolve of this great nation, alter that character, or eclipse the light of the values that we stand for." </div>
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Compare it with what he said at the Pentagon <a href="http://www.whitehouse.gov/the-press-office/2012/09/11/remarks-president-pentagon-memorial-service-remembrance-911">just the previous morning</a>: "No <b>act</b> of terror<b>ism</b> can ever change what we stand for." See the difference? In both speeches the lines are similarly placed, coming near the end. But the removal of "-ism" together with adding a "s" to "act" created enough ambiguity in the Rose Garden speech for <i>The Hill</i> to repeat "no acts of terror" and <a href="http://thehill.com/homenews/administration/248979-obama-condemns-shockinglibya-attack-vows-to-bring-killers-to-justice">then promptly state</a> that "[t]he attack occurred after an angry mob swarmed the U.S. consulate" and that "[t]he impetus for the attack appeared to be anger over a U.S.-financed film..." <i>The Hill</i> had no reservations about<b> associating "no acts of terror" with a description that applied </b><b>equally </b><b>to what happened in Cairo</b>, minus the fatalities. </div>
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One could argue that the addition of "s" to "act" was carefully chosen to create generality about what Obama was referring to, such that he could be referring to both Benghazi and Cairo, thereby emphasizing the similarities, but Obama did drop the plural after jetting to Nevada to campaign there <a href="http://www.whitehouse.gov/the-press-office/2012/09/12/remarks-president-campaign-event-las-vegas-nv">later that same day</a>, saying "[n]o act of terror will dim the light of the values that we proudly shine on the rest of the world..." and in Colorado <a href="http://www.whitehouse.gov/the-press-office/2012/09/13/remarks-president-golden-co">the next day</a>, saying "... no act of terror will go unpunished." The fact remains that he could be referring to every "act of terror" that had been committed against the U.S. over the last two decades or more, such that there was no specific reference to Benghazi at all. The most telling fact is that he<b> could have referred to "<i>this</i>" act and didn't</b>.</div>
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What did Obama know on September 12? <a href="http://www.defense.gov/news/newsarticle.aspx?id=118500">We know that</a> on September 11 "by 5:10 EDT an unarmed surveillance aircraft was on station over the Benghazi compound" providing video feed back to Washington and it was several hours later, "at 11:15 p.m. -- around 5 a.m. Sept. 12 in Benghazi -- the second U.S. facility there, an annex near the consulate, came under mortar and rocket-propelled grenade fire." The White House had reason to be watching the feed, since the Situation Room <a href="http://www.reuters.com/article/2012/10/24/us-usa-benghazi-emails-idUSBRE89N02C20121024">received an email</a> at 6:07 pm stating "Update 2: Ansar al-Sharia Claims Responsibility for Benghazi Attack." The London-based Quilliam Foundation had already <a href="http://www.quilliamfoundation.org/press-releases/the-attack-on-the-us-consulate-was-a-planned-terrorist-assault-against-us-and-libyan-interests/">announced</a> that "[t]he <b>military assault</b> against the US Consulate in Benghazi <b>should not be seen as part of a protest against a low budget film</b> which was insulting Islam... [rather it] was a <b>well planned terrorist attack that would have occurred regardless</b>..." by the time of his Rose Garden speech on the morning of the 12th. CNN <a href="http://news.blogs.cnn.com/2012/09/12/u-s-ambassador-to-libya-3-others-killed-in-rocket-attack-witness-says">reported</a> within two hours of that speech that "[yesterday]'s attack on the U.S. Consulate in Benghazi, Libya, was <b>planned in advance</b>, <b>U.S. sources told CNN</b>" and just four hours after the Rose Garden speech said "<b>U.S. sources say they do not believe the attacks</b> that killed Stevens and three other Americans in Benghazi, Libya, <b>were in reaction to the online release of a film</b> mocking Islam, CNN's Elise Labott reports. <b>'It was not an innocent mob,' one senior official said</b>." As you can see by my <a href="http://en.wikipedia.org/w/index.php?title=J._Christopher_Stevens&diff=512040189&oldid=512039580">edit of Wikipedia</a> to reflect this information, <b>this blogger was aware within 18 hours</b> of the attack that at least "one senior U.S. official" knew that "it was not an innocent mob" and that "U.S. sources" knew that it was "planned in advance." Within 14 hours of the attack Obama had told CBS' "60 Minutes" <a href="http://www.cbsnews.com/8301-18563_162-57538689/emails-detail-unfolding-benghazi-attack-on-sept-11/">that</a> "this is not a situation that was exactly the same as what happened in Egypt and my suspicion is that there are folks involved in this who were looking to target Americans from the start."</div>
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So how could Susan Rice do a Full Ginsburg (appearing on all five of the major English language Sunday talk shows) <b>four days later</b> to claim that there was a "spontaneous protest" that "escalated": </div>
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BOB SCHIEFFER: But you do not agree with [Libyan President, Mohammed Magariaf, who just preceded you here on this show] that this was something that had been plotted out several months ago?<br />
SUSAN RICE: We do not have information at present that leads us to conclude that this was premeditated or preplanned.<br />
BOB SCHIEFFER: Do you agree or disagree with him that al Qaeda had some part in this?<br />
SUSAN RICE: Well, we'll have to find out that out.</blockquote>
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In the past couple of days, there's been questions <a href="http://www.foxnews.com/politics/2012/11/16/petraeus-to-testify-knew-libya-was-terrorism-from-start-source-says/">about why</a> "<b>references to 'Al Qaeda involvement' were stripped</b> from [the CIA's] original talking points," but the fact that there was a conflict between what those at the off-the-record, non-partisan civil service level were saying and what those at the political appointee level like Rice were saying ought to have been obvious on September 16 to anyone who paid attention to what unnamed "U.S. officials" had said to the media prior to that Sunday.<br />
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When the Rose Garden remarks had come and gone with the<b> media having demonstrated that it would do its part by declining to link "acts of terror" to Benghazi at that time</b>, Obama clearly reckoned that he was free to indulge his preferred scenario for what happened in Benghazi. As one can see from <a href="http://www.youtube.com/watch?v=znVqyfxfbRQ">an American Crossroads' ad</a>, this was still going on on September 20. See <a href="http://noticias.univision.com/destino-2012/videos/encuentro-barack-obama-english/video/2012-09-20/meet-candidates-barack-obama">the following exchange</a> (from 2:02 remaining in the video) with Univision in Miami regarding "the attacks in Libya":</div>
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THE PRESIDENT: ...What we do know is that the natural protests that arose because of the outrage over the video were used as an excuse by extremists to see if they can also directly harm U.S. interests --<br />
Q Al Qaeda?<br />
THE PRESIDENT: Well, we don’t know yet...</blockquote>
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Note that Obama didn't find anything unreasonable about raging in the streets about a Youtube video that the U.S. government had nothing to do with. The only problem was that these "natural protests" "were used as "an excuse by extremists." What's particularly headshaking here is that<b> Obama was still insisting on "extremists" despite his own official spokesman</b> <a href="http://www.whitehouse.gov/the-press-office/2012/09/20/press-gaggle-press-secretary-jay-carney-en-route-miami-fl-9202012">having already stated</a> that "It is, I think, self-evident that what happened in Benghazi was a terrorist attack."<br />
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Key to the capacity to minimize the significance of any later backtracking to the "restore point" was the slapping of the "best available information at this time" caveat to every instance of narrative pushing. But there's still a difference between <i>minimization</i> and a <i>wholesale cover</i>, which a triggering of the "restore point" would involve. As I noted earlier, going into the second debate, Obama was under more pressure than he had been all year. Evidently he concluded that he could and should try to sweep the entire matter through the loophole of an ambiguous reference. To play a bit of amateur psychologist, it appears that Obama either consciously or unconsciously knew how dodgy it was of him <a href="http://www.debates.org/index.php?page=october-1-2012-the-second-obama-romney-presidential-debate">to declare</a> during the debate that "the day after the attack, Governor, I stood in the Rose Garden and I told the American people and the world that we are going to find out exactly what happened. That <b>this</b> was an act of terror..." because he immediately proceeded to work himself into tone of high dudgeon, thundering that "the suggestion that anybody in my team, whether the Secretary of State, our U.N. Ambassador, anybody on my team would play politics or mislead when we’ve lost four of our own, governor, is <b>offensive</b>." Obama <a href="http://foxnewsinsider.com/2012/11/14/krauthammer-obamas-indignant-defense-of-susan-rice-made-romney-and-the-binders-with-women-look-positively-feminist/">reprised</a> this indignation on November 14 with the fury with which he defended Susan Rice in his first press conference in eight months.<br />
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Now most of America knows what happened next. Romney said "I think it's interesting the president just said... that on the day after the attack he went into the Rose Garden and said that this was an act of terror" and instead of moderator Candy Crowley fact checking the word "this", Romney got fact checked on "act of terror." Never mind that <b>Crowley was wrong even there</b>, because Obama didn't actually say "act of terror" either, he said "acts". The damage was done. <b>The takeaway for millions of viewers not particularly interested in policy was that for all of Romney's rhetoric of moderation, he believes in "wingnut" conspiracy theories</b> and was accordingly disqualified as a candidate. The normally even-handed media watcher Erik Wemple of the Washington Post <a href="http://www.washingtonpost.com/blogs/erik-wemple/post/presidential-debate-did-conservative-media-hurt-romney-on-libya/2012/10/17/c817ea80-1804-11e2-a55c-39408fbe6a4b_blog.html">quoted</a> a Twitter claim that Romney had "confused conservative spin for the truth" and concluded that Romney had, indeed, been "confused" by the "conservative media" bubble.<br />
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Romney's rise in the polls hit the wall, and he subsequently couldn't get around it to the finish line (if one wants to call attention to the last minute surge towards Obama in the polling graph above, I suggest looking at <a href="http://www.journalism.org/analysis_report/final_days_media_campaign_2012">this study</a> of media bias in the last week of the campaign). The highlight point of the second debate was like the "show cards" scene in <i>Lock, Stock, and Two Smoking Barrels</i>. <b> </b>Like then, there was cheating involved, but unlike then the pot here was the White House.<br />
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<a href="http://upload.wikimedia.org/wikipedia/commons/d/da/Carney.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="191" src="http://upload.wikimedia.org/wikipedia/commons/d/da/Carney.JPG" width="200" /></a>
Now the media could have pointed out a <b>glaring weakness in the wingnut echo chamber theory, and that's that it wasn't just Romney that got caught up in it, <a href="http://www.whitehouse.gov/the-press-office/2012/09/20/press-gaggle-press-secretary-jay-carney-en-route-miami-fl-9202012">but the White House's own spokesman</a></b>!
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Q No, I just hadn’t heard the White House say that this was an act of terrorism or a terrorist attack. And I just --<br />
JAY CARNEY: I don’t think the fact that <b>we hadn’t</b>...</blockquote>
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The media's sins of commission were various (such as <i>Slate</i> journo David Weigel's <a href="http://www.slate.com/blogs/weigel/2012/11/14/john_mccain_s_long_war_against_susan_rice.html">claim</a> that that "On those Sunday shows, she said that extremists used a protest as a cover for their planned attack" when Rice not only made no claim that any element was "planned" but specifically rejected such a contention saying "we do <b>not</b> have information at present that leads us to conclude that this was <b>premeditated or preplanned</b>") but more grievous were the sins of omission. Instead of reminding readers of Mr Carney's "we hadn't," for example, the <i>New York Times</i> <a href="http://www.nytimes.com/2012/10/18/us/politics/questions-and-answers-on-the-benghazi-attack.html">told its readers</a> that "some <b>administration officials" "appeared to have forgotten"</b> Obama's earlier references to "terror"! How about actually naming those officials, which clearly included the White House Press Secretary as well as Rice, so that readers can decide for themselves whether there is just innocents"forgetting" here or whether there is something more Nixonesque at work. In the case of Obama himself, on September 20 he not only would he have had to have "forgotten" his own references to "terror" on September 12 and 13, he would have had to then remember again between September 20 and the time of the second debate.</div>
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I've <a href="http://briandell.blogspot.ca/2009/10/nick-griffin-white-house-vs-fox-and.html">noted before</a> that in 2009 a NPR journo viewed the administration's conduct as "Nixonesque," but he in fact wasn't the only one. Anderson Cooper of CNN also asked at that time "do you see shades of Nixon here?" and Ruth Marcus of the <i>Washington Post, </i>who occasionally appears on PBS Newshour as the "left" voice to David Brooks' "conservative" voice, <a href="http://voices.washingtonpost.com/postpartisan/2009/10/obamas_dumb_war_with_fox_news.html">thought that</a> the White House might have been giving off "a distinct Nixonian - Agnewesque? - aroma..." Surrogates for the White House complained loudly about the comparison at the time, but I pointed out even then that there seemed to be a pattern developing, saying "[t]hat suggestion of mine that FOX will be frozen out in terms of participation has come true more thoroughly than I expected." Now guess who was <a href="http://www.washingtonpost.com/blogs/erik-wemple/post/why-exclude-fox-news-from-benghazi-intel-briefing/2012/11/05/0d7c47fc-2696-11e2-9972-71bf64ea091c_blog.html">frozen out of a briefing on Benghazi</a>...</div>
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<b>UPDATE November 21:</b></div>
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Some have argued that I'm making too much out of "decimate," such that a contemporaneous acknowledgment of a terrorist attack with an al Qaeda link wouldn't have been significantly "off message." Here I could point to the sentence immediately preceding Rice's claim here where she herself connects it to the campaign trail: "I think American people know the record very well. President Obama said when he was running for President that he would refocus our efforts and attentions on al Qaeda." I could also note the sensitivity of administration officials elsewhere, such as the ferocity with which Hillary spokesman Philippe Reines went after CNN and, subsequently, <a href="http://www.buzzfeed.com/buzzfeedpolitics/hillary-clinton-aide-tells-reporter-to-fuck-off">Michael Hastings of Buzzfeed</a> for being too nosy (as an aside, what happened in Benghazi doesn't seem to have stuck to Hillary at all, perhaps because <a href="http://online.wsj.com/article/SB10001424052970204712904578092853621061838.html">so many State Department sources blamed Petraeus' CIA</a>). But Exhibit A here is <i>New York Time</i>s' opinion pages editor Andrew Rosenthal trotting out the following as "<a href="http://takingnote.blogs.nytimes.com/2012/11/21/the-benghazi-conspiracy/">The Benghazi Conspiracy</a>":</div>
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[McCain] and other Republicans seem to think that the White House, and U.N. Ambassador Susan Rice, played down the possibility that Al Qaeda operatives were behind the attack, so that President Obama could boast on the campaign trail that his policies had decimated the terrorist organization. In other words he lied to the American public so that he could win re-election. </blockquote>
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<a href="http://i1.kym-cdn.com/photos/images/newsfeed/000/342/270/bba.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="172" src="http://i1.kym-cdn.com/photos/images/newsfeed/000/342/270/bba.png" width="200" /></a>Rosenthal seems to be of the view that his second sentence would readily follow his first if only there were some truth to the administration having having claimed that they had "decimated the terrorist organization." Point being here that whether this blogger is using using the word "correctly" or not is beside the point because it is Susan Rice who is using it, and using it in the way a NYT editor believes would prove a "conspiracy."</div>
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I"ll also note here another support point for my thesis that "the takeaway for millions of viewers not particularly interested in policy was that for all of Romney's rhetoric of moderation, he.. 'confused conservative spin for the truth'" in the form of<a href="http://swampland.time.com/2012/11/20/the-benghazi-circus/"> Joe Klein's TIME magazine piece</a>. What jumped out at me was: </div>
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the President called the Benghazi attack an 'act of terror' the day after it took place – which proved a rather embarrassing moment for Mitt Romney in the third debate, when Candy Crowley corrected him on the point (Romney’s information throughout the campaign was defective, having been sourced by right-wing fantasy reports).</blockquote>
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Would "right-wing fantasy reports" include the CNN-cited September 12 Quilliam report that directly contradicts your claim that "there would have been no terrorist attack if the film hadn’t provided the opportunity for mayhem," Joe? I take it you'd rather believe that the attack was <i>coincidentally</i> on the 11th anniversary of 9/11 and that there were <i>coincidentally</i> no other "protests" in Libya regarding the film. Perhaps, Joe, you should talk to you own colleague at TIME, James Poniewozik, about the dangers of "right-wing fantasy reports" given that Poniewozik <a href="http://entertainment.time.com/2012/09/12/the-anti-mohammed-video-ridiculous-and-now-deadly-serious/">linked to</a> CNN's story "<i>Pro-al Qaeda group seen behind deadly Benghazi attack</i>" when the issue was whether "the deadly attack in Benghazi was planned independently of the movie protests" or not. I suppose the report of a <a href="http://www.independent.co.uk/news/world/politics/revealed-inside-story-of-us-envoys-assassination-8135797.html">Libyan officer who was there</a> for the attack on the safe house saying "I don't know how they found the place to carry out the attack. It was planned, the accuracy with which the mortars hit us was too good for any ordinary revolutionaries," is yet another "right wing fantasy report." Joe Klein pops the right wing media bubble to advise us that not only was the "first [attack] a spontaneous response to the anti-Islamic film that had caused similar protests in Cairo and elsewhere," but the second attack raining precise mortar fire down on the secret safe house was also executed by "protesters." Even the administration <a href="http://thecable.foreignpolicy.com/posts/2012/10/09/state_department_no_video_protest_at_the_benghazi_consulate">doesn't believe this anymore</a>, Joe. </div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com4tag:blogger.com,1999:blog-6897479481146623890.post-40810371819499970642012-11-01T02:00:00.001-06:002012-11-01T21:07:43.671-06:00the real problem with Nate Silver's election prediction model<div dir="ltr" style="text-align: left;" trbidi="on">
<i><b>note</b>: I've got an extended preamble here about the debate regarding modeling in general. If you want to get straight to my particular issues with the FiveThirtyEight prediction model, scroll down to the bolded text.</i><br />
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Just before the Alberta provincial election in April I left for China, and a couple weeks ago I arrived back in Edmonton, in time for another election south of the border.<br />
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In the last week before Tuesday's vote, it seems that one of North America's most popular pastimes is poll watching. This has created a significant, albeit temporary, demand for online one stop shops that aggregate the polls, and the most popular sites add value by assessing how each poll should be used to make a prediction. </div>
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This means modeling. You take the data, run it through the model, and out pops a prediction.</div>
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Most of these modelers are predicting a solid Obama victory (i.e. with several dozen electoral votes to spare). Sam Wang's "<a href="http://election.princeton.edu/">Princeton Election Consortium</a>", for example, is of the view that the "Bayesian Prediction" of Obama's re-election chance is 98.1%. Now this particular site is partisan, so partisan, in fact, that he's using his site to <a href="https://secure.actblue.com/contribute/page/pec2012">raise money for Democrat candidates</a>. The site that's getting the most attention, though is Nate Silver's <a href="http://fivethirtyeight.blogs.nytimes.com/">FiveThirtyEight blog</a> which is now hosted by the New York Times. Silver is also an Obama supporter, but doesn't have the incumbent as quite such an overwhelming favourite, pegging Obama as a 3 to 1 favourite to win the popular vote and slightly more of a favourite to win the Electoral College (and thus the election).</div>
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After Josh Jordan wrote a piece titled "Nate Silver's Flawed Model" for the National Review (no link as NRO's servers are in NYC and are under water) the liberal economists Paul Krugman and Brad DeLong weighed in, with Krugman insisting that this challenge to Nate Silver's model be seen as part of a "<a href="http://krugman.blogs.nytimes.com/2012/10/28/the-war-on-objectivity/">War on Objectivity</a>" assuring us that "if these people triumph, science — or any kind of scholarship — will become impossible."</div>
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I'll leave aside the irony of Krugman declaring "if it isn’t what the right wants to hear, the messenger is subjected to a smear campaign" while he smears the critic of Nate Silver's model without specifically taking issue with so much as a single word of the offending post, stating simply that the criticism amounts to a "disgraceful episode. And the fact that the National Review ran with this tells you all you need to know about the publication."</div>
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What stuns me is that these liberals riding in to defend the honour of Nate Silver and his modeling are the same crowd that insists Wall Street's wizards are the cause of America's ailments. Now there are exceptions. Dean Baker is another leftist economist and he's <a href="http://www.cepr.net/index.php/blogs/beat-the-press/what-krugman-said-with-a-not-so-small-addendum">of the view</a> that "We would be in pretty much the same place today even if the financial crisis had not happened." That's a view I happen to agree with, after all, the fancy derivative products that overcompensated financial engineers came up with are just that, derivative, meaning they are dependent upon and derive their value from what's happening in the underlying "real" economy. But that doesn't mean that these people didn't obscure the price signals in such a way as to aggravate the misallocation of the capital that was occurring in the real economy. How did these hot shots get away with it? Because people treated them like Krugman is demanding we treat Nate Silver, that's why! Silver uses exponential smoothing with a decay factor and Monte Carlo simulation! Do you plebes understand that stuff? No? Then sit down and show some respect!</div>
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This is, of course, why hedge fund managers are so grossly overpaid. There is no clear need for a finance industry beyond various straightforward functions such as putting people with business ideas together with people with capital but we've got these great towers of High Finance because, well, it's fueled by flows of money that get directed at whoever appears to be the smartest, and that generally means whoever's got the most complicated sounding model.</div>
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The economic consequence of Krugman stepping up to praise Silver is that the market will conclude Silver deserves a million dollar salary. Yet Krugman's "liberal conscience" will of course soon compel him to turn around and complain about income inequality! Dean Baker has <a href="http://www.cepr.net/index.php/publications/books/the-end-of-loser-liberalism">figured out how dumb this all is:</a></div>
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Progressives... have been losing not just because conservatives have so much more money and power, but also because they have accepted the conservatives’ framing of political debates. They have accepted a framing where conservatives want market outcomes whereas liberals want the government to intervene to bring about outcomes that they consider fair.<br />
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This "loser liberalism" is bad policy and horrible politics. Progressives would be better off fighting battles over the structure of markets so that they don't redistribute income upward.</blockquote>
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Baker has noted that part of the reason U.S. doctors and lawyers make so much money is because they have monopolies. More international competition (i.e. free trade in professional services) would lower prices for ordinary Americans, and the people hurt would be people who are doing very well already. Trying to instead move the money around via the tax system buys into the argument that these service providers rightly own the fruits of their monopoly power.</div>
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I could go on here but this preamble is already quite lengthy so <b>I'll turn to my particular objections to Silver's model</b>.</div>
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I'm not going to take issue with Silver's prediction of who will win the electoral college except to note that a lot of people are wrongly interpreting the slide in Romney's probability of winning as Obama momentum. This is in fact just a consequence of Silver's model having a time decay. If the home team is down 3 to zero in the third inning, if they are still down three zip in the bottom of the ninth that doesn't mean the away team has scored any more runs, but it does mean that the behind team is running out of "at bats." In Silver's line graph there is therefore a force that pushes in both directions away from the 50% line. The fact Romney was able to move up closer to the centre line earlier in October was all the more impressive because it was pushing up against this time gravity.</div>
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What I will take issue with is Silver's prediction that the odds of Obama winning the electoral college and losing the national popular vote are just 5.1%. A big driver of this is Silver's skepticism that Romney will win the popular vote, pegging as he does Romney's chances at that at 24.3%, little better than Romney's 21% chance of winning the electoral college.</div>
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How can they be less than 25% when Rasmussen's national poll has Romney <a href="http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll">ahead by two points</a> and Gallup has Romney up by five? There are other national polls, of course, but almost all of them have Romney either tied, ahead of Obama (albeit by less), or at worst behind just 1 point.</div>
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Silver's response would be that there is other data out there. There are state polls and these can be used to supplement the national polls for a more accurate prediction of the national popular vote. Now this is perfectly sound in theory but how exactly does he do this? Silver went into detail on this <a href="http://fivethirtyeight.blogs.nytimes.com/2012/07/24/state-and-national-polls-tell-different-tales-about-state-of-campaign/">back in July</a>. One of Silver's critical beliefs here is that "the relative order of the states [i.e. how they line up relative to the national trend in terms of "redness" or "blueness"] is extremely consistent from year to year." Now right there you have the weakness of most models: the assumption that the future will continue to be like the past. It is not irrelevant to note that a split between the popular vote and the electoral college verdict has been historically rare, but it should be tested against various narratives that might explain why this time it's different. </div>
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The fact is that Silver makes some adjustments based on considerations unique to each cycle anyway, so the "extreme consistency" is limited even in his own eyes. An example of this is his "adjustment for home state effects." "On average, a presidential candidate gets a seven-point push in his home state," he observes, and he therefore has the model push Massachusetts somewhat redder in "the relative order of the states" because Romney's from there. Now this is where you need to start asking yourself if Massachusetts is really going to go redder this year. Sometimes familiarity breeds contempt, no? Don't "identity politics" apply in other aspects as well? One has to stop somewhere, of course, and that's my point: Silver stopped too early when it comes to considering what's different about 2012.</div>
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According to Silver's "FiveThirtyEight Presidential Voting Index - 2012" Pennsylvania is seven states bluer than Ohio in the state order. If Obama is ahead in Ohio by 2, then he should be up in Pennsylvania by more than 8 points. Wisconsin is even bluer; Obama should be ahead in Wisconsin by 9.5% if he's up in Ohio by 2%. If Obama is just 2 points back in North Carolina, then Obama should have an 9.6% lead in Pennsylvania and have a full 11% lead in Wisconsin. Thus spake the model. But this doesn't square with what we are seeing on the ground. David Axelrod may have promised to <a href="http://www.youtube.com/watch?v=bEHINbg75GE">shave his mustache</a> if Obama loses any of Minnesota, Michigan, or Pennsylvania, but that doesn't change the fact that the Obama campaign is committing resources to these states. The liberal leaning Pittsburgh Post-Gazette <a href="http://old.post-gazette.com/pg/12306/1273489-454.stm">says that</a> Pennsylvania is being "flooded with television ads." Now maybe Romney and his allies have decided to go after Pennsylvania because they've been banging their heads against the wall in Ohio for a long time with little progress and so now they're making the Hail Mary pass next door. But that doesn't explain why the Obama campaign is spending money to counter this; - after all, didn't Nate Silver say that "the relative order of the states is extremely consistent from year to year," meaning that the "battleground" states don't change? If we turn to Michigan, there are no less than 14 states between Michigan and North Carolina in Silver's rank index. If we check against the current polling, we see that Realclearpolitics (RCP) has Romney <a href="http://www.realclearpolitics.com/epolls/2012/president/mi/michigan_romney_vs_obama-1811.html">just 3 points behind</a> while Silver's index says that if Obama is 2 points behind in North Carolina (which is how Silver currently rates the situation in NC) Obama should be a whopping 13.9% ahead in Michigan. If we turn to Wisconsin, we see that instead of that 11% lead for Obama in this state that I noted above, RCP's polling average <a href="http://www.realclearpolitics.com/epolls/2012/president/wi/wisconsin_romney_vs_obama-1871.html">says</a> Romney is just 4% back. Despite these underestimates of Romney's support when using the "battleground states" of NC and OH to predict the not-so-battleground states of Pennsylvania, Michigan, and Wisconsin "we can use this index to calculate an implied national popular vote," Silver insists. </div>
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Silver addressed some of these concerns Wednesday (October 31): </div>
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Michigan is probably not as close as two or three points right now: most polls released after the first debate in Denver suggested a lead for Mr. Obama in the mid-to-high single digits. Usually, states do not shift all that much relative to others in their region. The fact that Mr. Obama’s polling has held up reasonably well in Ohio and Iowa, for example, is reason to suspect that some of the movement in the poll represents statistical noise, even if it comes from a good polling company.</blockquote>
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Does anyone else see the circular reasoning here? Michigan can't be that close because "states do not shift all that much relative to others in their region." In other words, Michigan can't be that close because my model says it can't be that close!</div>
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Now it should be acknowledged here that Silver doesn't just use the "battleground" states to predict the national vote. He does use the other states. So wouldn't that balance things out? It could, if weighted by expected 2012 turnout and we had good up-to-date polling of those other states. But Silver doesn't do that. Take Utah, for example. Silver gives it a weight of 0.05, while Florida gets a weight of 1.58. Florida thus gets more than 30 times the weight of Utah. But Florida's population is less than 7 times Utah's. Utah has only been polled twice since June, but both of these Utah polls were from mid-October and they've got Romney ahead by 51% and 53% for an average of 52%. That's 14.7% ahead of where Silver's "index" says Romney should be, and that's relative to the United States (meaning Romney is even farther ahead in Utah of where he should be relative relative to NC or OH). While Romney's Utah support gets underweighted (and this doesn't even go beyond the relative population difference to note that people who lean Republican turn out more frequently than people who lean Democrat), Obama's Florida support gets overweighted, where Romney is running 3.6% <i>behind</i> where Silver's index says Romney should be. I could make the same point here using Michigan instead of Utah and North Carolina instead of Florida.<br />
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Silver calls this weighting a "wrinkle" that is not "that important." He says that he cannot weight just by turnout because the "quantity and quality of polling" varies from state to state. As Silver put it in July, "So — although technically it determines an implied national popular vote for South Carolina — the South Carolina value receives very little weight in the overall calculation since the only poll there was conducted months ago." In response to this, allow me to quote from this article titled, "<a href="http://discovermagazine.com/2010/jul-aug/29-why-scientific-studies-often-wrong-streetlight-effect">Why Scientific Studies Are So Often Wrong: The Streetlight Effect</a>": </div>
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The fundamental error here is summed up in an old joke scientists love to tell. Late at night, a police officer finds a drunk man crawling around on his hands and knees under a streetlight. The drunk man tells the officer he’s looking for his wallet. When the officer asks if he’s sure this is where he dropped the wallet, the man replies that he thinks he more likely dropped it across the street. Then why are you looking over here? the befuddled officer asks. Because the light’s better here, explains the drunk man.</blockquote>
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So in order to predict the national vote, Silver upweights "battleground" states like Ohio because the "light's better there."</div>
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Can anybody guess why Romney might be doing better in Utah than your typical Republican in the past? I'm sure you can come up with a theory there. Why might he being doing worse in Ohio? Perhaps the "Not one of us" ads that Obama swamped the state with all summer in order to paint Romney as hostile to the working man brought Romney's support in blue collar Ohio lower without hurting Romney's support in the rest of the country (where the ads weren't aired) in the same proportion.</div>
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I'll make one final note here. In his October 31 post Silver pointed at some other modelers and noted that they generally agreed with him. As someone who works in finance I feel compelled to note that this is why so many supposedly brilliant hedge fund managers have their funds go bust. They build these impressive appearing models that attract capital by virtue of their impressiveness without much consideration for the fact that the other hedgies are doing the same thing. So when there is a market shock of some sort, these guys all end up trying to go in the same direction because their models are similar, and then they can't get out of their positions because there isn't anybody to take the other side of the trade!</div>
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Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com2tag:blogger.com,1999:blog-6897479481146623890.post-27915243436110628602012-04-24T05:26:00.017-06:002012-04-24T07:53:21.366-06:002012 Alberta election post-mortemI 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).<div><br /></div><div>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 <i>always</i> 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.</div><div><br /></div><div>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. <i>La plus ça change, plus c'est la même chose...</i></div><div><br /></div><div><div>First, the best and worst outcomes of the night in terms of riding wins and losses:</div><div><br /></div><div>MOST DISAPPOINTING:</div><div>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 <a href="http://www.theglobeandmail.com/news/politics/danielle-smith-blames-controversial-remarks-strategic-voting-for-loss-in-alberta-election/article2411971/">reporting</a> 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.</div><div><br /></div><div>The greatest disappointment then, in my mind, is not Calgary Glenmore which <i>might </i>prove<i> </i>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.</div><div><br /></div><div>MOST ENCOURAGING:</div><div>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. </div><div><br /></div><div>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 <a href="http://briandell.blogspot.com/2010/01/policy-vs-politics-in-alberta.html">in the past</a> 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.</div></div><div><br /></div><div>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 <a href="http://www.theglobeandmail.com/news/opinions/editorials/alberta-pcs-will-need-to-do-some-soul-searching-despite-election-win/article2411955/">editorial</a> 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.</div><div><br /></div><div>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.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com7tag:blogger.com,1999:blog-6897479481146623890.post-68541827548428914892012-04-16T11:29:00.014-06:002012-04-18T22:10:52.407-06:00a Wildrose government?<div>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.</div><div><br /></div><div>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.</div><div><br /></div><div>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? </div><div><br /></div><div>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" <a href="http://www.ccfd.ca/index.php?option=com_content&task=view&id=30&Itemid=58">according to Link</a> but not those that cross to Wildrose? Belinda makes the Wildrose <i>eminence grise</i> "<a href="http://www.ccfd.ca/index.php?option=com_content&task=view&id=21&Itemid=58">gag</a>" 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.</div><div><br /></div><div>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 <a href="http://www.inews880.com/Channels/Reg/LocalNews/story.aspx?ID=1181482">conversation</a> with iNews880 reporter Liza Yuzda about the floor crossings on January 5, 2010:<br /></div><div><blockquote>"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.</blockquote> </div><div><br />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, <a href="http://www.cbc.ca/news/canada/albertavotes2012/story/2012/04/11/albertavotes2012-wildrose-pc-anderson-floor-crossed.html">says</a> 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 <a href="http://briandell.blogspot.ca/2010/11/why-im-not-wildrose-member.html">not true</a>. 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.<br /><br /></div><div>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.<br /><br /></div><div>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.<br /><br /></div><div>Which brings me to the Wildrose's 5 point campaign plan. As so ably <a href="http://briandell.blogspot.ca/2010/08/this-wildroser-salutes-kevin-taft.html">noted</a> 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 <a href="http://taxvox.taxpolicycenter.org/">TaxVox</a> have been complaining about this fragmentation of the tax code in North America for a long time now and conservative economists <a href="http://www.forbes.com/sites/powerlunch/2011/08/30/a-modest-tax-reform-proposal-for-the-super-committee/">understand</a> this <a href="http://www.forbes.com/sites/powerlunch/2011/08/25/why-grover-norquist-is-wrong-about-taxes/">point</a>. 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.</div><div><br /></div><div>When Danielle <a href="http://www.theglobeandmail.com/news/politics/alberta-election/is-albertas-wildrose-party-channelling-big-brother/article2392136/">slammed</a> "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. </div><div><br /></div><div>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 <a href="http://daveberta.ca/2012/04/allan-hunsperger-wildrose-candidate/">controversial candidate</a> in any case.</div><div><br /></div><div>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.</div><div><br /></div><div>"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?" </div><div><i>- Joseph Conrad, "Lord Jim"</i></div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com5tag:blogger.com,1999:blog-6897479481146623890.post-79546988960878525122012-02-07T15:58:00.006-07:002012-02-07T20:12:24.713-07:00State of the Rose: Wildrose vs libertarians reduxA <i>lot</i> 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 <a href="http://daveberta.ca/2011/10/craig-chandler-launches-anti-wildrose-facebook-group/">disqualification</a> as a Wildrose candidate.<div><br /></div><div>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 <a href="http://briandell.blogspot.com/2010/10/state-of-rose-wildrose-vs-libertarians.html">blogpost from October 2010</a> 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 [<a href="http://www.wildrosecaucus.ca/wildrose-statement-on-ontario-court-prostitution-ruling/">caucus statement re Ontario prostitution ruling</a>] suggests that these critics are voicing a view that is <i>generally</i> 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. </div><div><br /></div><div>Now it's true that no one in the Wildrose caucus has been as straightforward as US Presidential candidate Rick Santorum (photo at right). <img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 120px; height: 152px;" src="http://upload.wikimedia.org/wikipedia/commons/5/5c/Rick_Santorum_official_photo.jpg" border="0" alt="" />In June 2011 Santorum <a href="http://townhall.com/tipsheet/greghengler/2012/01/05/rick_santorums_real_concerns_about_the_tea_party">stated</a> 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 <i>éminence grise</i> 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.</div><div><br /></div><div>After the 2010 AGM I <a href="http://briandell.blogspot.com/2010/06/wildrose-agm-review-part-2-exec.html">welcomed</a> 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. <i>Who is controlling who here?</i></div><div><i><br /></i></div><div>Does Wildrose offer the fiscal conservatism libertarians would be interested in? When the party is promising <i>more</i> 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.</div><div><br /></div><div> </div><div>The elephant in the room with regard to spending remains, as I've long argued, the public sector unions. A recent <a href="http://www.policyschool.ucalgary.ca/sites/default/files/research/boesenkool-public-wage-growth.pdf">U of Calgary study</a> 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,</div><div><blockquote>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.</blockquote><br />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) <a href="http://briandell.blogspot.com/2010/11/why-im-not-wildrose-member.html">wanted to delete</a> 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.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-91655855692906010542012-01-18T19:48:00.061-07:002012-02-07T15:55:06.370-07:00the Wikipedia agenda: civil liberties at the expense of the factsHaving 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.<div><br /></div><div>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? </div><div div=""><div>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 <a href="http://commons.wikimedia.org/wiki/Template:WikimediaCopyrightWarning">"all rights reserved"</a>.<br /></div><div><br /></div><div>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.</div><div><br /></div><div>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.</div><div><br /></div><div>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?</div><div><br /></div><div>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, <a href="http://en.wikipedia.org/w/index.php?title=Wikipedia:SOPA_initiative/Learn_more&action=history">and did</a>, 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:</div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:Identifying_reliable_sources">WP:Identifying_reliable_sources</a></div><div>- 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</div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:NOTADVOCATE#ADVOCATE">WP:</a><a href="http://en.wikipedia.org/wiki/Wikipedia:NOTADVOCATE#ADVOCATE">Wikipedia is not a soapbox or means of promotion</a><br /><a href="http://en.wikipedia.org/wiki/Wikipedia:WORTHYCAUSE">WP:Wikipedia is not here to tell the world about your noble cause</a></div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:NOT#NEWS">WP:Wikipedia is not a newspaper</a></div><div>- 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: ...."</div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:NOTCENSORED">WP:Wikipedia is not censored</a></div><div>- 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 "<a href="http://en.wikipedia.org/wiki/We_had_to_destroy_the_village_to_save_it">we had to destroy the village in order to save it</a>" mentality, I suppose.</div><div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:POINT">WP:Do not disrupt Wikipedia to illustrate a point</a></div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:NPOV">Wikipedia:Neutral point of view</a></div><div>- "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 <a href="http://wikimediafoundation.org/wiki/Advisory_Board#Mitch_Kapor">former founder and chair</a> of the EFF. Former WMF general counsel Mike Godwin used to be an EFF lawyer.</div></div><div><a href="http://en.wikipedia.org/wiki/Wikipedia:Polling_is_not_a_substitute_for_discussion">WP:Polling is not a substitute for discussion</a></div><div>- 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 <a href="http://en.wikipedia.org/wiki/Wikipedia:NOTDEMOCRACY#DEMOCRACY">to policy</a>, "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 <a href="http://en.wikipedia.org/wiki/Wikipedia_talk:SOPA_initiative/Action/Archive_1#Interference_by_the_WMF">shoved these efforts off into the obscurity</a> 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.</div><div><br /></div><div>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 <i>in the minority</i> 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.</div><div><br /></div><div><b>The truth about SOPA/PIPA</b></div><div><br /></div><div>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 "<a href="http://creativeamerica.org/media/uploaded/resources/22_1326935959_Rogue_Sites_Fact_Vs_Fiction_Jan2012-FINAL-1-17-12.pdf">Fact vs Fiction</a>" 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 <a href="http://en.wikipedia.org/wiki/Wikipedia:SOPA_initiative">directing</a> readers to the virulently anti-Republican website <a href="http://www.dailykos.com/story/2011/12/11/1044328/-Update-On-Stop-Online-Piracy-Act:-This-Weeks-Activism-Plan-In-Front-Of-Thursday-Vote">Daily Kos</a> (with DKos in turn <a href="http://www.dailykos.com/story/2011/12/14/1045408/-Wikipedia-Discussing-Strike-To-Protest-SOPA">directing</a> its readers towards Jimmy Wales' poll). Brigham is also directing Foundation funds towards <a href="http://disclosures.house.gov/ld/pdfform.aspx?id=300433882">Washington lobbyists</a> 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.</div><div><br /></div><div>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? "<i>If SOPA passes, there will be no more YouTube, Twitter, Google, Wikipedia, Facebook and many more sites you love to use!</i>" or something similar. What happens when a lie is <i>literally</i> 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.</div><div><br /></div><div>This is not the case. <a href="http://en.wikipedia.org/wiki/Wikipedia:ELNEVER#Restrictions_on_linking">WP:ELNEVER</a> says that "editors are restricted from linking to the following, <b>without exception</b>: 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. </div><div><br /></div><div><b>The Left Coast Agenda</b></div><div><br /></div><div>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 <a href="http://www.bostonherald.com/news/opinion/editorials/view/20220119a_halt_to_online_theft/">notes</a>, "thank goodness, Google and Wikipedia have thus far raised no objection [to that]. This week Jimbo <a href="http://edition.cnn.com/2012/01/17/tech/web/wikipedia-sopa-blackout-qa/index.html">told CNN</a> 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 <a href="http://leahy.senate.gov/press/press_releases/release/?id=721ddff6-3399-4d56-a966-bca3f848759b">indicated</a> 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 <a href="http://www.nypost.com/p/news/opinion/opedcolumnists/protecting_americans_from_web_scams_lvOOEKJEqzpjGIAW43mIXP">this editorial</a> 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 <a href="http://www.broadcastingcable.com/article/479056-SOPA_Backers_Get_Some_Help_From_Dutch_Court.php">ordered</a> 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 <a href="http://www.techradar.com/news/internet/australian-government-adds-wikileaks-to-banned-website-list-585894">over 3,500 sites</a>? 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 <a href="http://www.techradar.com/news/internet/australian-government-adds-wikileaks-to-banned-website-list-585894">when</a> 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 <i>Wikipedia</i>'s blacklists in the name of free information, e.g. from a unanimous <a href="http://en.wikipedia.org/wiki/Wikipedia:Requests_for_arbitration/MONGO#Outing_sites_as_attack_sites">ArbCom decision dated 20 October 2006</a>: "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?</div><div><br /></div><div>Answer: in San Francisco. As the Financial Post has <a href="http://www.financialpost.com/magazine/Gardner/3938665/story.html">reported</a>, 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 <a href="http://www.cbsnews.com/8301-505244_162-57361243/protest-exposes-silicon-valley-hollywood-rivalry/">reported</a> 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.</div><div><br /></div><div>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. <a href="http://en.wikipedia.org/wiki/Zack_Exley">Zack Exley</a>, the longtime leftist activist and <a href="https://political.moveon.org/donate/noi.html?id=6409-1340845-jouZDZ40U4uCTLG6.15QIQ&t=3">internet rabble rouser</a>, 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 <a href="http://suegardner.org/2011/11/08/three-occupy-wall-street-tactics-the-wikimedia-movement-should-copy/">joined Occupy Wall Street</a> in November and afterwards called on Wikimedia to "copy OWS tactics." In a blogpost she recommended that readers consult <a href="http://en.wikipedia.org/wiki/Feministing">Feministing</a> and <a href="http://en.wikipedia.org/wiki/The_Nation">The Nation</a>, a self-described "flagship of the left."</div><div><br /></div><div>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 <a href="http://www.uschamber.com/about/management/david-hirschmann">David Hirschmann</a>, 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 "<a href="http://www.itif.org/publications/steal-these-policies-strategies-reducing-digital-piracy">Steal These Policies</a>" 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."</div><div><br /></div><div>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, <a href="http://www.rkmc.com/Hillel-Parness.htm">Hillel I. Parness,</a> an intellectual property lawyer who also teaches at Columbia's School of Law, looked at SOPA/PIPA back in November and <a href="http://www.readwriteweb.com/enterprise/2011/11/legal-analysis-of-sopa-protect.php">concluded</a> 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 <a href="http://www.pcworld.com/article/194400/google_youtube_was_sustained_by_piracy.html">once identified</a> 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.</div><div><br /></div><div>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..."<br /><br />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."</div><div><br /></div><div>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.</div><br /><div>As one music industry spokesman <a href="http://bostonglobe.com/business/2012/01/19/internet-big-names-unite-against-antipiracy-bills/15UqDwprL2SMnmxfal29JL/story.html">said</a>, "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.<div><div><br /></div><div>UPDATE (January 19):</div><div><br /></div><div>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.</div><div><br />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). </div></div></div><div><br /></div><div>Yesterday RIAA CEO Cary Sherman <a href="http://www.nytimes.com/2012/01/19/technology/protests-of-antipiracy-bills-unite-web.html">observed</a> that "it's very difficult to counter the misinformation while the disseminators own the platform." </div><div><br /></div><div>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.</div><div><br /></div><div>She owned the platform and I didn't.</div><div><br /></div><div>UPDATE (January 21):<br />See Nick Poole's remarks in <a href="http://hstryqt.tumblr.com/post/16064147845/wikipedia-the-neutrality-paradox">this</a> comment thread of a Wikipedia blogger.</div><div><br /></div><div>UPDATE (February 7):<br />Bill Keller has <a href="http://www.nytimes.com/2012/02/06/opinion/steal-this-column.html">written</a> one of the most even-handed reviews of this issue that I've seen.</div></div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com9tag:blogger.com,1999:blog-6897479481146623890.post-54944884989189098972011-10-04T12:58:00.004-06:002011-10-04T18:59:48.217-06:00Alberta politics in downward spiralAlthough 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.<div><br /></div><div>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, <a href="http://briandell.blogspot.com/2010/10/state-of-rose-education.html">an example</a> 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 <a href="http://www.nationalpost.com/opinion/columnists/Wildrose+wavers+rights+councils/5463756/story.html">caves on this issue</a> as well.</div><div><br /></div><div>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.</div><div><br /></div><div>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. <a href="http://www.statcan.gc.ca/daily-quotidien/090114/dq090114a-eng.htm">According to StatsCan</a>, "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 <a href="http://briandell.blogspot.com/2010/08/this-wildroser-salutes-kevin-taft.html">Kevin Taft</a>. 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 <a href="http://briandell.blogspot.com/2011/03/leave-it-to-de-bever.html">identified</a> as "easily the most effective MLA on the Heritage Fund committee," has left the party.</div><div><br /></div><div>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 <a href="http://mauricetougas.wordpress.com/2011/09/18/the-pc-race-in-one-liberals-view/">described</a> the elevation of Alison Redford to the Premier's office as "a potential neutron bomb" that could destroy the Alberta Liberals. </div><div><br /></div><div>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 <a href="http://www.economist.com/node/18119187">is</a> "widely regarded as one of the most progressive in the world," the <a href="http://www.economist.com/node/21529041">level of racial hatred and violence</a> 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, <a href="http://www.economist.com/node/21528309">saying</a> “those who feel irritated by our friendship… can go jump in the pool.”</div><div><br />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 <a href="http://www.edmontonjournal.com/news/Sorry+Redford+honeymoon+over/5498101/story.html">declaring</a> that the Legislature will not sit this autumn.<br /><br /></div><div>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 <i>lead </i>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 <a href="http://www.forbes.com/sites/powerlunch/2011/08/30/a-modest-tax-reform-proposal-for-the-super-committee/">widely</a> <a href="http://taxvox.taxpolicycenter.org/2011/09/29/taxes-and-energy-policy/">lamented</a> by contemporary tax economists, including those <a href="http://www.theglobeandmail.com/news/opinions/opinion/shutting-down-stephen-harpers-tax-boutique/article1944748/">in Canada</a>.</div><div><br /></div><div>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.</div><div><br /></div><div>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.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com4tag:blogger.com,1999:blog-6897479481146623890.post-89086856696580141642011-05-27T18:24:00.003-06:002011-05-27T18:36:04.885-06:00Romney sells out againI 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).<div><br /></div><div>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. </div><div><br /></div><div>Apparently Romney has declared without ambiguity that "I <a href="http://www.realclearpolitics.com/articles/2011/05/27/romney_in_iowa_i_support_the_subsidy_of_ethanol_110011.html">support the subsidy</a> 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.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-79579578352515529702011-04-18T23:40:00.021-06:002011-04-19T10:56:33.937-06:00MPT gives thumbs up to Garth TurnerAs I noted in my last post, Stephen Gordon has got it right on corporate taxation. Unfortunately he has it wrong, however, when he <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/garth-turner-bleg.html">calls for</a> former MP and financial advice blogger <a href="http://www.greaterfool.ca/2011/04/17/the-goal-of-life/">Garth Turner</a> to be corrected with "the math."<div><div><div><br /></div><div>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.</div><div><br /></div><div>In the comments to Gordon's post, <a href="http://blog.andyharless.com/">Andy Harless</a> 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 <i>a</i> and <i>b</i> so that you can use leverage, i.e., take away the constraint that <i>a</i>+<i>b</i>=1." Sorry, but one cannot take away the constraint that the coefficients add up to 1 <i>without taking away the equation</i>. A weighted average means the coefficients must sum to 1 by definition.</div><div><br /></div><div>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 <i>a</i> = 1. In the new portfolio, <i>a</i> 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 <i>a</i> + <i>b</i> + <i>c</i> = 1 + 0.5 - 0.5 = 1.</div><div><br /></div><div>Since variance is the square of standard deviation ("σ"), the variance of the portfolio is given by</div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFZEVjju0ygulKFOV5wI7DFeIMcfSoQzJXeMxlg1GVDPcHajzzF5y1dLlTrcFvZDVmVon3Ali7ltOnRBc6Dv33smIfnL6q1SYqkwi1dzwxUF1l8OlY6aV4KYL9nMZku8spEECNMjzWYKs3/s1600/equation.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 463px; height: 70px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFZEVjju0ygulKFOV5wI7DFeIMcfSoQzJXeMxlg1GVDPcHajzzF5y1dLlTrcFvZDVmVon3Ali7ltOnRBc6Dv33smIfnL6q1SYqkwi1dzwxUF1l8OlY6aV4KYL9nMZku8spEECNMjzWYKs3/s1600/equation.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5597134922710732130" /></a><br /><br /></div><div><br /></div><div><br /></div><div><br /></div><div>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.</div><div><br /></div><div>Plugging these numbers in means the deviation for the new portfolio is 8.66%:</div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7P178d64Tc5Nc8AiqGr1Ye0SJvt05Lf_Mt4N0l2KjSSNU_pebSDwsUlh6qrZC8SkcZnh-ptcqrdPWcNOxpjUBa8HN3vOeOCEk5LWKtFSgUAXHXT8_zu91-3lnTKZLk7SSZyMuSLtWLD8u/s1600/equation2.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 486px; height: 90px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7P178d64Tc5Nc8AiqGr1Ye0SJvt05Lf_Mt4N0l2KjSSNU_pebSDwsUlh6qrZC8SkcZnh-ptcqrdPWcNOxpjUBa8HN3vOeOCEk5LWKtFSgUAXHXT8_zu91-3lnTKZLk7SSZyMuSLtWLD8u/s1600/equation2.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5597150471941654658" /></a><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>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<i> higher after adjusting for the increased risk</i>. MPT uses what's called the Sharpe ratio to measure excess return <i>per unit of risk</i>. 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:</div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLD_DoItKQ6iL5ZInfdTmz3HTzBPev0JrtXxJNv14du3LGbid6J3s6bJ3qlOIFhVLOyjfFqJ7uF2u7d2B8j-4JfSVbPkOnzQBF9lTzN4w-k1ScnRcp9BDI9M-sudKJg_12iTOfPuGPx8A9/s1600/equation3.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 280px; height: 89px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLD_DoItKQ6iL5ZInfdTmz3HTzBPev0JrtXxJNv14du3LGbid6J3s6bJ3qlOIFhVLOyjfFqJ7uF2u7d2B8j-4JfSVbPkOnzQBF9lTzN4w-k1ScnRcp9BDI9M-sudKJg_12iTOfPuGPx8A9/s400/equation3.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5597154021571704722" /></a><div><br /></div><div><br /></div><div><br /></div><div><br /><br /><br />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.</div><div><br /></div><div>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.</div><div><br /></div><div>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 <span style="font-style:italic;">new</span> 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:</div></div></div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYJbOi-bvqszIQtDf97SuA9mtvV1220hsAhgQXItpqUYi6jF1aJu9uWgpD5u_8fV2RF-UD5hc9AwXwh7CF298qegATnhMU5UD98ront3Mwa_zDgAKVTiax4P1xXZkOFCT8lNiIz7EQaBje/s1600/levered.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 486px; height: 267px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYJbOi-bvqszIQtDf97SuA9mtvV1220hsAhgQXItpqUYi6jF1aJu9uWgpD5u_8fV2RF-UD5hc9AwXwh7CF298qegATnhMU5UD98ront3Mwa_zDgAKVTiax4P1xXZkOFCT8lNiIz7EQaBje/s1600/levered.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5597161600679861426" /></a><br /></div><div><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />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.</div><div><br /></div><div>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.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-78139672467634256582011-04-13T19:48:00.006-06:002011-04-14T12:28:16.695-06:00off-balance sheet governmentWere the current federal election campaign to come and go without my blogging about it, this blog would surely be given up for dead completely. Hence a few "observations."<div><br /></div><div>My objection to the Harper Conservatives that they aren't really conservative remains, but it is interesting that more of the policy community is cottoning on to how narrow "tax cuts" are actually social programs dressed up at please the smaller government crowd. <a href="http://www.taxpolicycenter.org/events/images/TPC_LogoBlue_1.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:right; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 262px; height: 151px;" src="http://www.taxpolicycenter.org/events/images/TPC_LogoBlue_1.jpg" border="0" alt="" /></a>The centrist Brookings Institute recently hosted a <a href="http://www.taxpolicycenter.org/events/Should-We-Put-the-Brakes-on-Tax-Breaks.cfm">panel discussion</a> on the topic that follows up what <a href="http://www.nytimes.com/2010/11/21/business/economy/21view.html">Greg Mankiw</a> and other economists having been saying. This afternoon President Obama called for cutting a trillion dollars worth of "tax expenditures", a cut the Republicans will of course describe as a tax hike.</div><div><br /></div><div>The Tories' March budget continued to fragment the tax code, and the one big dollar proposal the Tories have made to date as a campaign promise, which is to allow more income splitting between couples (after the deficit has been eliminated), continues in that vein.</div><div><br /></div><div>Income splitting is a broader tax break than most of the other extremely narrowly targeted tax breaks the government has offered, but it is still selective. What matters here is that this revenue loss comes at the opportunity cost of providing tax relief to <i>everyone</i>. What is the economic rationale for not providing relief to individuals as well? What social or equality objective rationale is served by a policy that does nothing for families headed by single mothers? The short answer of course is that it serves a <i>political</i> objective: getting credit for proposing a "tax credit" but then restricting its cost by narrowing its application.</div><div><br /></div><div>Want to give a handout to an influential interest group but avoid "conservative" ire at your spending? Ask your staff to investigate the nature of that group's tax liability and then structure the handout so as to reduce that liability as opposed to an overt subsidy. Gives the group the same benefit while nominally keeping the "size of government" limited. One can call it moving government off-balance sheet, because although the the size of government is nominally limited, it has still interfered in the allocation of resources across the economy. What does it mean to be an economic "conservative", if not to prefer private markets over central planning?</div><div><br /></div><div>Aside from this, there's the more obviously non-conservative policies espoused by the Harper regime, like attacking the Liberals for not standing as strongly behind trade barriers (e.g. <a href="http://www.theglobeandmail.com/news/politics/harper-pledges-to-keep-dairy-policies/article1978950/">noting</a> that the “Liberal Party’s platform makes no mention of supply management.”) This is the same supply management, of course, that Harper denounced as "government-sponsored price-fixing cartels" when he was a private citizen instead of a politician.</div><div><br /></div><div>The Harper government is simply too hostile to complex policy for those who appreciate the need for such complexity for someone like myself to not conclude that working for or supporting them would not be prohibitively frustrating.</div><br /><a href="http://media.canada.com/c28b49cb-824e-4590-8065-1f6a14db8c91/liberal-greenshift-1119%20.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 210px; height: 210px;" src="http://media.canada.com/c28b49cb-824e-4590-8065-1f6a14db8c91/liberal-greenshift-1119%20.jpg" border="0" alt="" /></a><div>In 2008, instead of sending a new Tory backbencher with a legal cloud over his head to Ottawa to represent Edmonton-Sherwood Park, a voter like myself could check off the Liberal candidate and send a PhD in Economics to Ottawa to represent the riding and support a Liberal platform that called for a targeted tax with a sound economic rationale. Although the "Green Shift" was somewhat corrupted as a policy plank, it still aimed to discourage production that created a negative (or <i>possibly</i> negative, which is the minimum that can be said about carbon emissions) externality.</div><div><br /></div><div>2011 is <i>somewhat</i> different. The Tory attitude in general has hardly changed - consider the <a href="http://www.theglobeandmail.com/news/politics/what-are-canadians-really-afraid-of-when-it-comes-to-crime/article1978257/page5/">statement</a> of Harper's former Chief of Staff that "Politically it helped us tremendously to be attacked by this coalition of university types." But the Conservatives are actually on the right side of the issue with respect to corporate tax cuts, and it appears that this idea was actually allowed to escape from the non-partisan Department of Finance as opposed to being hatched, like most Tory policies, in the brain of a Conservative "strategist"/poller.</div><div><br /></div><a href="http://www.ecn.ulaval.ca/uploads/pics/SGordon_r.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:right; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 140px; height: 210px;" src="http://www.ecn.ulaval.ca/uploads/pics/SGordon_r.jpg" border="0" alt="" /></a> I won't repeat all the arguments for a cut in the general corporate rate. <a href="http://worthwhile.typepad.com/">Stephen Gordon</a> (photo at right from Laval University), has been making valuable <a href="http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/">contributions</a> on the Globe and Mail's website that have served as a corrective to some of the claims of <a href="http://www.progressive-economics.ca/">labour economists</a> as the topic has developed as a political issue. I say labour economists instead of "progressive" economists because for those who are not on a union payroll, I believe a full analysis would lead them to agree with Laura D'Andrea Tyson, who notes on the NY Times website that "a high corporate tax rate... is also increasingly ineffective as a tool to achieve more progressive outcomes..." Most astute observers understand what the preponderance of evidence and argument supports.<div><div><br /><div>Toronto Star columnist James Travers (photo below) passed away on March 3 and, in keeping with the Star's political lean, was a fierce critic of the Harper regime. Travers nonetheless understood that several "conservative" principles like free trade are well justified. Travers' February 8 column neatly summed the politics of the corporate tax cut issue:</div><div></div><blockquote><div><a href="http://media.thestar.topscms.com/images/2e/b7/c84186c44756bb01a119829b9aef.jpeg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 225px; height: 167px;" src="http://media.thestar.topscms.com/images/2e/b7/c84186c44756bb01a119829b9aef.jpeg" border="0" alt="" /></a>Caught on the slippery slope of a popular proposition, Harper and Finance Minister Jim Flaherty are appealing to voter’s cerebral side. Aided and abetted by conservative economists, they’re constructing the analytical case that corporate tax cuts will pay dividends in jobs as well as productivity and won’t cost the federal treasury the $6 billion annually that critics claim.</div><div>...</div> Watching Conservatives slip and slide trying to push a policy rock uphill is a delicious treat for political rivals, deputy ministers and egghead academics.<br />For five years now they have been struggling against the ruling party’s populist gravity. ...</blockquote><a href="http://eyeonck.files.wordpress.com/2011/01/jack-layton-low.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="float:right; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 218px; height: 183px;" src="http://eyeonck.files.wordpress.com/2011/01/jack-layton-low.jpg" border="0" alt="" /></a><br />In my view, Michael Ignatieff's run to the left wasn't just bad policy but bad politics. Jack Layton is not about to be snookered at his own game of appealing to the anti-"corporate agenda" crowd. The Tories created all sorts of space for an opposition campaign that indicated that it would stay the course economically (or got even more aggressive on deficit reduction) but attacked the government for its contempt for Parliament and its contempt for "university types" in general, which manifests itself in things like manipulating the census, something that disturbed many swing voters. Instead the Liberals have tried to appeal to NDP voters, which is only going to be as effective as Jack Layton allows it to be. Judging from last night's TV debates, I don't think Layton lost any people to Ignatieff, meaning Ignatieff will likely end up ruing the decision to focus on the Liberal/NDP swing vote instead of the Liberal/Conservative swing vote.</div></div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com3tag:blogger.com,1999:blog-6897479481146623890.post-72968907923234395822011-03-14T22:54:00.011-06:002011-03-16T10:46:37.233-06:00nuclear nervousness13 months ago I traveled through what I would call the northern part of Japan's main island but which the Japanese call the east, including through Sendai, the coastal capital of Miyagi Prefecture. Westerners are rarely found around here, at least at this time of year. Sendai has known destruction before, as the "Sendai City War Reconstruction Memorial Hall" explains in its review of the American bombing of the city in July 1945. I then took a break from the February snow in Japan's north to fly down to tropical Okinawa, where I stayed at <a href="http://travel.rakuten.co.jp/HOTEL/12688/CUSTOM/1268850212193937.html">a capsule hotel</a> for about $30 a night until I found a different place which was more like $20. I was woken up early in the morning by the sensation that a gigantic dog had taken my capsule in its teeth and was shaking it. Since the hotel's WiFi was still working and I had my smartphone with me, after some minutes I learned from the US Geological Survey website that the epicentre of <a href="http://earthquake.usgs.gov/earthquakes/recenteqsww/Quakes/us2010teb2.php">this earthquake</a> was just 80 km away.<div><br /></div><div>What astounded me was that the Japanese literally won't get out of bed for anything less than a 7.0 earthquake. Tremors are a regular fact of life for the Japanese, and it accordingly did not surprise me to see Japanese supermarket workers being more concerned about bottles breaking than about building integrity <a href="http://www.youtube.com/watch?v=x9QNzGY0qxw">on YouTube</a>. It was only after the intensity of the tremors rose and lasted for an unusual long duration that locals would have become especially concerned.</div><div><br /></div><div>I've been to Japan twice now and I've come to really love the country. It has endured <a href="http://www.youtube.com/watch?v=-LsruxmeEBc">a disaster</a> but of the many individual catastrophes that occurred in the wake of the earthquake and tsunami, a particular disaster is receiving far more attention than a proportionate and rational perspective would provide.</div><div><br /></div><div>I'm talking nuclear, of course. <i>Noo-klee-ur!</i> The very word that sends a chill down some spines. </div><div><br /></div><div>Now I'll grant that the situation at the Fukushima I power plant has deteriorated substantially, as the amount of radiation released on March 15 was non-trivial and it has been acknowledged that containment integrity at Unit 2 has been partly damaged. I could make some observations here about the situation at Fukushima, such as calling attention to the fact the station apparently kept humming despite a massive earthquake (it was the tsunami that has caused its problems), the fact that newer plants are not as dependent upon external power sources to maintain their cooling systems, whether from the grid or portable backup, the fact most experts contend that - especially after several days have passed - a full meltdown remains highly unlikely, or the fact that the problems are essentially problems of the sort an oil refinery could face in a no power situation (explosions from flammable but otherwise non-toxic gases, short-lived fire at a unit with waste material that released some environmentally harmful toxins). At issue is not the facts on the ground in Fukushima, but the reasonableness of the popular reaction to them. As one authority (among many) <a href="http://www.latimes.com/health/boostershots/la-heb-radiation-fears-20110314,0,2491642.story">has observed</a>, people "don't have a particularly good grasp of the science of radiation and tend to over-exaggerate the risks."<br /></div><div><br /></div><div>Consider the history of nuclear accidents.</div><div><br /></div><div>The number of people who ultimately became sick because of the Three Mile Island accident? Zero.</div><div><br /></div><div>In 1987 in Goiânia, Brazil, a radiation scare resulting from an old nuclear medicine source being scavenged from an abandoned hospital caused more than 130 000 people to overwhelm hospital emergency rooms. Ultimately just 250 were found to be contaminated through the use of Geiger counters and just 20 showed signs of radiation sickness and needed treatment.</div><div><br /></div><div>In 2005 a team of 100 scientists produced a 600 page <a href="http://www.who.int/mediacentre/news/releases/2005/pr38/en/index.html">report</a> for a consortium of UN agencies on the legacy of Chernobyl. Although an accident on Chernobyl's scale is not conceivable in a developed democracy (where all reactors have containment vessels) the team found that even in Chernobyl's case, </div><blockquote>By and large... we have not found profound negative health impacts to the rest of the population in surrounding areas, nor have we found widespread contamination that would continue to pose a substantial threat to human health, within a few exceptional, restricted areas.</blockquote><div><br />More importantly, however, is the finding that "the largest public health problem created by the accident” is the <i>psychological</i> impact. This is partially attributed to a <i>lack of accurate information</i>. 20 years after the accident, the greatest problems are identified as negative self-assessments of health, belief in a shortened life expectancy, lack of initiative, and dependency on assistance from the state.</div><div><br /></div><div>The hysteria over nuclear power, in other words, didn't just aggravate the health problem, it practically constituted the whole health problem in and of itself!</div><div><br /></div><div>UPDATE:</div><div><br /></div><div>The Washington Post <a href="http://www.washingtonpost.com/national/fear-is-potent-risk-of-japanese-nuclear-crisis/2011/03/14/AB76TxV_story.html">cites</a> a radiation expert who notes that of more than 80 000 survivors of the Hiroshima and Nagasaki blasts, about 9000 subsequently died of some form of cancer. But only about 500 of those cases could be attributed to the radiation exposure the people experienced.<br /><blockquote>The average amount of radiation that victims in Hiroshima and Nagasaki were exposed to would increase the risk of dying from lung cancer by about 40 percent, [the expert] said. Smoking a pack of cigarettes a day increases the risk of dying of lung cancer by about 400 percent.</blockquote></div><div><br /></div><div>Meanwhile, this <a href="http://www.slate.com/id/2288212/">Slate column</a> makes the same argument I do but with a better turn of phrase and some more facts. Charlie Martin at PJM has <a href="http://pajamasmedia.com/blog/fear-the-media-meltdown-not-the-nuclear-one/">more</a> in this general vein. </div><div><br /></div><div>EPA guidelines for workers in emergency situations are radiation doses of 10 rem (100 mSv) when protecting "valuable property" and 25 rem (250 mSv) when protecting populations. What does a 25 rem dose mean? <a href="http://www.epa.gov/rpdweb00/docs/er/400-r-92-001.pdf">According to</a> the EPA, it means one's lifetime risk of cancer would increase by 1% on average (from 20% to 21%). Compare this 1% increased risk for workers at the Fukushima site to the reality of worker fatalities on the Deepwater Horizon rig last year, and keep in mind that no Fukushima worker in Japan has yet reportedly received a dose even this high, never mind the general public. Although there was a <a href="http://www.jaif.or.jp/english/news_images/pdf/ENGNEWS01_1300273535P.pdf">reading</a> of 400 mSv/hr at one location in the plant at one particular point in time, at the same point in time the level was more than 10 times lower just 50 meters away.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-76006995349309529662011-02-14T14:15:00.006-07:002011-02-14T15:58:50.266-07:00the power of personalityI have wound down my blogging, in the short term because I have been on the road and don't expect to be back in Alberta for at least a month yet, and in the longer term because, at least with respect to Alberta politics, I had largely said what I wanted to say on the subject and didn't want to muddy the message (that Albertans need to turn more of their current incomes into assets, real or financial, that will grow into the future).<div><br /></div><div>The new year's news from Canada's most fortunate province creates some interesting prospects for further shake-ups on the political and policy fronts, however.</div><div></div><div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://upload.wikimedia.org/wikipedia/commons/3/3f/Ed_Stelmach2.jpg"><img style="float:right; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 148px; height: 201px;" src="http://upload.wikimedia.org/wikipedia/commons/3/3f/Ed_Stelmach2.jpg" border="0" alt="" /></a><br />The premier not running for re-election is the biggest news, although there is a limit to what the pundits can add to this headline. Albertans already know that Ed Stelmach (photo at right) was a charisma-challenged but nice guy. Whether it was his fault or not, it was on Ed's watch that a rival party emerged that, for the first time since at least 1993, seriously threatens the Progressive Conservative dynasty. It is nonetheless worth reflecting on the fact that Mr Stelmach's resignation announcement came less than 3 years after his winning an electoral landslide. What changed to compromise Steady Eddie's political security when he'd already proven that he can kick the Wildrose Alliance to the curb? Danielle Smith?</div><div><br /></div><div>Which brings me to the main thesis of this post, which is that personality - and personalities - matter more, and ideology less, in politics than many observers appreciate. While it is generally recognized to matter with respect to the individual party leaders, consider the fact that the next tier of people below the leader are also, well, people, with personalities, and so on down.</div><div><br /></div><div>Daveberta's <a href="http://daveberta.ca/2011/02/not-seeing-the-forest-for-the-trees-swanns-departure-will-change-little/#comments">blogpost</a> on the resignation of Alberta Liberal David Swann (left) has attracted no less than 60 comments, and a comment by <a href="http://calgarygrit.blogspot.com/">Calgary Grit</a>, <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://upload.wikimedia.org/wikipedia/commons/e/ec/David_Swann.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 154px; height: 232px;" src="http://upload.wikimedia.org/wikipedia/commons/e/ec/David_Swann.jpg" border="0" alt="" /></a>the most read (or perhaps just most readable) blogger on federal politics who (formerly) hails from Alberta is a representative example of the sort of punditry that gets a lot of thumbs up from those who have not been heavily involved in internal party politics and/or the machinery of government. CG contends that the Alberta Liberal Party and the fledgling Alberta Party occupy the same "centrist" ideological ground, while "[Wildrose leader Danielle] Smith and [PC leadership candidate Ted] Morton [are] splitting the right wing vote..." To a lot of people it makes perfect sense to look through an ideological prism like this and assume one is getting a reasonably complete view. While I have never really been a true political party "insider", based on what experience I do have, and especially upon my experience working within the machinery of government in a central agency, I would characterize this perspective as one that perhaps <i>ought</i> to be satisfactorily explanatory, but not one that <i>is</i>. </div><div><br /></div><div>Consider how the cogs of government policy actually turn. Suppose you were to come into a position of real political power in a parliamentary democracy. This would generally involve being elected and then being assigned a cabinet position responsible for a ministry. The first thing one would be expected to look at after being sworn in would be the briefing books prepared by the civil servants in one's Department. A great many problems will be identified in these materials and solutions suggested, problems and solutions that never made it into the political campaign debates because 1) the issues are too dull to interest the electorate or 2) the solutions are generally unpopular with the electorate. When I first loaded up my 1982 Mazda RX-7 with my limited personal effects to drive from Edmonton to Ottawa nine years ago and begin work for what was then Paul Martin's Department of Finance, I was curious as to how the competing ideologies would play out in the policy discussions that occurred. Of course, at the end of day the elected Minister makes the final policy call, but what of the details? I was ultimately struck by how un-ideological the Department actually was and I came to appreciate how frequently "ideological differences" are just political campaign artifacts as opposed to seriously competing policy alternatives. </div><div><br /></div><div>Having said that, I have to concede that the dominant culture is only non-ideological if one sees organizations like the IMF, OECD, World Bank, European Commission, etc as non-ideological. Some strong leftists would contend that there is an "anti-people" or "corporate" agenda dominating these entities and if that's true then this agenda dominates the culture in provincial finance ministries as well. But I don't believe it is, in fact, a left or right matter nearly so much as a matter of how populist one is in one's sensitivities. It's not the job of, say, an OECD economist to recommend what the "people" want. What the people want in the short term may be in full contradiction with what they want in the long term. Now, there are several "think tanks" that are clearly "ideological" in almost everyone's eyes and an organization like a Department of Finance or a Privy Council Office is somewhat analogous to a think tank, but neutralize the funding of these think tanks (e.g. take self-styled "progressive economist" Jim Stanford off the union payroll, or diversify the Frontier Centre's funding from former Alberta Report readers) and a remarkable consensus would emerge on <i>most</i> issues. As it is, I think the consensus is already there, one simply has people like Stanford trying to obscure the "expert" consensus on, say, the efficiency of corporate taxes at the one end while at the other end the Frontier Centre obscures it on, say, the efficiency of carbon taxes.</div><div><br /></div><div>As a newly minted minister, one's first lesson would thus concern how one's ideas about what one is going to do in office have to be heavily modified based on the advice of one's ministry re what is feasible and just what the most pressing problems are. An example here would be how neither Jim Flaherty nor the federal Tories in general felt that income trust taxation was a problem in need of a solution before taking office. It was after being bombarded with memos from the civil service saying there was a problem that Flaherty eventually overruled his political staff to make a move on the file (as an aside, when I learned that Wildrose constituency operations manager <a href="http://twitter.com/drshillington">Dave Shillington</a> was part of Flaherty's political office at the time, although I suspected we would end up disagreeing on something significant in Wildrose it wasn't until Dave indicated to me that he was inclined to take a laissez-faire attitude towards how nominations were conducted that I saw a red flag for a disputed nomination at some point down the road and, more ominously, a party culture that sees loud self-promoters advance at the expense of quieter voices).</div><div><br /></div><div>The decisions of real consequence cannot, or at least should not, be taken unilaterally by a minister, however, even if the decision is well-informed by consultations with one's Department, external experts, and industry. One still has to convince one's cabinet colleagues. Suppose I was elected as the sole Wildrose MLA from within Edmonton city limits. I might have to be made finance minister simply because, given the political realities, an Edmontonian would have to get a post that at least appears to be among the most important. Now of course I would be encouraging my cabinet colleagues running line departments to support cuts to or at least caps on their budgets, and especially cuts to line items are only indirectly related (as in the case of wages and benefits for current provincial workers) or not related at all (as in the case of benefits for <i>retired</i> provincial workers) to the quality and quantity of services delivered to the general public. But how much power I would actually have in this situation, at the top level of internal party politics and of the government machinery, is only very approximately suggested by what an external pundit like Calgary Grit reckons the ideological positioning of my party to be. The personalities of those around the cabinet table matter far more, and it matters more the higher one gets. </div><div><br /></div><div>When I blogged here last year saying I should no longer be described as a current Wildrose supporter, I noticed a couple people wanting to explain my defection in terms of ideology. As someone who joined the Wildrose Party even before it merged with the Alberta Alliance, I'm easily perceived as a fiscal conservative ideologue who cannot tolerate the ideological compromises that a mature brokerage party must inevitably make. But in fact I believe I would have more influence and work more effectively as part of an Alberta Party cabinet than a Wildrose one, despite the fact the Alberta Party is universally seen as significantly to the left of Wildrose. If I wasn't a member of a the cabinet but a backbencher or even just a local constituency figure, the situation would be same but at a lower intensity. Now it's true that in a parliamentary system, it is the first minister who drives cabinet dynamics. If the party leader wants to shoot down a spending proposal originating from a line department, for example, he or she will typically ask the finance minister for his or her thoughts at the cabinet table. In the case of Wildrose, although Danielle Smith would make a good premier, if I demanded that we go to war with the public service unions, or cut back on all the programs that amount to subsidies to farmers and accordingly distort the provincial economy, I doubt that she would be keen to back me in a dispute with, say, Rob Anderson who would warn darkly of the political consequences of picking a fight with the unions, or Link Byfield who would be sensitive to the political consequences of alienating rural Alberta. This isn't to say that I'm concerned the leader would tell me to sit down and shut up. <i>I can't even imagine Danielle telling someone to sit down and shut up.</i> It's rather that she wouldn't tell <i>anyone</i> to sit down and shut up and as a consequence the voice of the professional policy community would be left to fend for itself against the self-promoters, opportunists, demagogues, and assorted lobbyists<i>. </i>It's the power of personalities. If people think my problem is that I'm upset about having ended up on the losing side of an ideological showdown, I can only say, "if only!" There was about as much of an ideological showdown as the one in the federal Tory party that led it to going on a spending spree when in government (which is to say, effectively none).</div><div><br /></div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://a6.sphotos.ak.fbcdn.net/hphotos-ak-snc6/180755_133440493389117_131338170266016_218535_2643176_n.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 213px; height: 160px;" src="http://a6.sphotos.ak.fbcdn.net/hphotos-ak-snc6/180755_133440493389117_131338170266016_218535_2643176_n.jpg" border="0" alt="" /></a><div>Which brings me to <a href="http://www.facebook.com/Griffs4ABsFuture">Doug Griffiths</a>. Not only does Doug (at left with wife Sue, photo from Facebook) make time to hear out the professional policy community, he understands how these sorts of people get drowned out and pushed aside in the jungle of politics. He's a fiscal conservative, which of course I find salutary, but more important to his appeal to pundits across the spectrum is that he does not try to push a particular agenda per se so much as call for a framework that ensures that sober, serious, evidence-based agendas win out. If Doug were first minister, I believe he would be less interested in getting his way, like so many politicians who have a pre-conceived and rigid idea about what's wrong with world and how they are going to fix it, than in ensuring that those who are following the advice they are getting from their Departments and non-partisan experts get a full hearing despite the political risks, and, more importantly for democracy, ensuring that that hearing occurs in front of Albertans as opposed to behind closed doors. I don't just endorse Doug Griffiths for leader of the Progressive Conservative Association of Alberta. Whether Alberta Party, PC Party, or Wildrose, if Griffiths were contending for the leadership I would be taking out a membership to support him. I admit that this seems to contradict my call for more ideology, or more precisely more ideas and consistency in those ideas, in what distinguishes and defines political parties, but that's because I think it generally needs to be made clear to campaign volunteers and donors that they are working for something larger, that they are a part of, than just a person who is not a part of their personal lives. I am not asking readers here to help advance someone's political career because he deserves it. I don't know Doug personally and I don't know what he deserves in terms of his personal fate. I support Doug Griffiths because what he stands for deserves support.</div><div><br /></div><div>Liberal party? Whenever I think about joining the Alberta Liberals, which is never for more than an occasional nano-second, I ask myself how I would explain the move to friends and family. The politically active could potentially understand, but everyone else would think I've lost my compass completely. I could call attention to a selection of <a href="http://briandell.blogspot.com/2010/08/this-wildroser-salutes-kevin-taft.html">Kevin Taft speeches</a> but Taft is no longer leader. Federally, besides the Liberals there is no other option to the Harper Conservatives that isn't fundamentally at odds with either the federation or the prosperity-creating business community. That's not the case in Alberta.</div><div><br /></div><div>In any case, I'm <a href="http://www.albertaparty.ca/member-profile-robert-leddy/">not the only person</a> who ran for election under the Wildrose Alliance banner in 2008 to now be mulling support (if not more) for the relatively legacy-free (dare I say, baggage-free) Alberta Party. </div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com2tag:blogger.com,1999:blog-6897479481146623890.post-8500608537170514312010-12-08T01:00:00.006-07:002010-12-08T02:30:40.492-07:00in the news<div>It's been a week and a half since my last post here and it is likely that blogging will drop off to once every two or three weeks for the next couple months since I will be on the road again after Christmas. I've been meaning to switch to musings of a more philosophical nature, such as a post on equality as a public policy objective, but a few remarks on recent headlines is much quicker:</div><div><ul><li>The Globe and Mail <a href="http://www.theglobeandmail.com/news/politics/ottawa-notebook/cluster-strategy-puts-tories-on-track-for-majority-poll-suggests/article1827215/">reported</a> that according to a Nik Nanos poll, the federal Tories could potentially get a majority government despite weakness in Quebec. Nanos' belief that the Conservatives have mastered the art of "narrowcast[ing] messages to clusters of ridings on a diversity of issues such as crime, the long-gun registry and social issues" (while having nothing to substantive to say on fiscal matters) reminds me of my last post on "client politics."</li><br /><li>The New York Times recently published a <a href="http://www.nytimes.com/2010/12/05/us/politics/05states.html">story</a> that notes that "the finances of some state and local governments are so distressed that some analysts say they are reminded of the run-up to the subprime mortgage meltdown or of the debt crisis hitting nations in Europe." A financier is quoted as saying "[i]t seems to me that crying wolf is probably a good thing to do at this point."<br />Today the Wall Street Journal <a href="http://online.wsj.com/article/SB10001424052748704250704576005683169980902.html">notes</a> that California, which has often served as the poster child for budget dysfunction, is running a $6.1 billion budget gap, which represents 6.6% of its budget. Alberta's $5 billion deficit, in contrast, is more than double this fraction of its budget.</li><br /><li>Yesterday, Environics revealed a <a href="http://www.environicsresearch.com/media_room/default.asp?aID=738">poll</a> that found that support for Alberta's governing party was 34%... for the fourth Environics poll in a roll. The Wildrose Alliance gained, however, with the test sample of 252 Edmonton voters indicating that a full quarter of them would support the upstart party, a stunning 9 point gain over the 16% showing in the spring. Since the PCs held steady, this gain had to come from someone else, and indeed the Alberta Liberals were down 7 points in Edmonton (and Calgary as well). Danielle Smith's party polling ahead of David Swann's in the capital city is certainly remarkable, but of particular interest to me is that just 3% felt that "fiscal/budget issues" represented the most important issue facing the province. Meanwhile 47% said health care was #1. This after a spike in health care spending in the last provincial budget that was well into the double digits in terms of year over year percentage increase. The immediate conclusion is that deficits could be run for many years before concern about them would approach concern about healthcare. One would think that taxes could raised, given that just 1% identified taxes as the most important issue, but one has to wonder about the political feasibility of such a move when even the Liberals are saying that revenue is already sufficient.</li></ul></div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com2tag:blogger.com,1999:blog-6897479481146623890.post-81515793652758487112010-11-27T20:14:00.006-07:002010-11-27T21:23:49.943-07:00client politicsThis weekend Globe and Mail Business columnist Derek DeCloet <a href="http://www.theglobeandmail.com/report-on-business/commentary/derek-decloet/staring-into-the-abyss-of-us-debt-its-not-all-doom-and-gloom/article1815811/">advised</a> us that "it's not all doom and gloom" with respect to management of the US debt burden.<div><br /></div><div>Looking just at the numbers, I have to agree. The numbers indicate that the federal government probably won't be "hitting the wall" until around 2030, when the older boomers will be in their 80s and even the youngest ones retired. Joshua Rauh's paper on state pension liabilities <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1596679">predicts</a> that the day of reckoning on the state level may occur sooner ("many state systems will run out of money in 10-20 years") but it's true that the United States had the superior system <a href="http://www.archive.org/details/MakeMine1948">60 years ago</a> and there hasn't been a revolution that has overturned a system that has stood the test of time.</div><div><br /></div><div>The challenge for America today is that it the competitiveness that ensured an efficient economic allocation in the past has eroded and this erosion is being exposed by inevitable globalization. While US business culture continues to support innovation and competitiveness, it must work within the context of public policy and the US public sector is in need of significant reform.</div><div><br /></div><div>A large obstacle to reform is the <a href="http://www.nationalaffairs.com/publications/detail/the-trouble-with-public-sector-unions">influence</a> of public sector unions; a writer for the <i>Prospect</i> <a href="http://prospect.org/cs/articles?article=scapegoating_federal_workers">argues</a> that, in fact, federal workers do not receive too much because the average annual compensation of $120 000 is not the wage number: "It's salary, plus the value of health insurance, plus the value of other benefits like pensions." That's purely a marketing argument, of course, because the liability of the taxpayer doesn't change just because that $120K includes a pension element. At the heart of the public sector problem is the fact that, as a public union boss has <a href="http://www.bostonherald.com/news/opinion/op_ed/view/20101029afscmes_intent_to_work_over_taxpayers/">admitted</a>, "We have the ability, in a sense, to elect our own boss."</div><div><br /></div><div>The fundamental obstacle to public policy change is nonetheless public opinion in the USA. A commentator to an <i>Economist</i> story titled "America's Deficit: Confronting the Monster" <a href="http://www.economist.com/node/17520102/comments">observed</a>:</div><div><blockquote>It is impossible to make [the public] understand that the optimum amount of tax to raise and the optimum way to raise that amount are separate questions. Hence the politician's adage that "the only good tax is an old tax."</blockquote></div><div><br />The US tax system is so colossally fragmented, it was possible for the deficit commission co-chairs to cut tax brackets significantly and still generate a trillion dollars in revenue just by eliminating tax expenditures. Tax expenditures, as Greg Mankiw explains in <a href="http://www.nytimes.com/2010/11/21/business/economy/21view.html">this op-ed</a>, are essentially the same thing as subsidies but can be marketed as tax cuts. It's a handout to a politically powerful interest group. Although Republicans are not shy about supporting direct subsidies <a href="http://republicans.agriculture.house.gov/pr090225.shtml">when it suits them</a>, they generally prefer that handouts be dressed up as (targeted) tax cuts. However one wants to describe it, the phenomenon that created the mess otherwise known as the US tax code is <a href="http://en.wikipedia.org/wiki/Client_politics">client politics</a>.</div><div><br /></div><div>The Conservative Party of Canada has imported several US political ideas into Canada, with a notable recent example being the idea that the national census constitutes a violation of privacy. Although the Republicans made an issue out of this <a href="http://www.nytimes.com/2010/08/20/us/politics/20census.html">just this summer</a>, the real founder of the idea is Michelle Bachmann (R-Minn.), who <a href="http://www.youtube.com/watch?v=0ZS9UW0okY4">went after</a> the US census in the first half of 2009. Glenn Beck was left shaking his head but the Harper government seems to have thought the idea was brilliant. There has, however, been times when the federal Conservatives practiced conviction politics, albeit on very rare occasions. An example would be the taxation of income trusts. The move to tax trusts was accompanied with a move to lower taxes on corporations (hence the revenue neutrality of the decision). The tax cut for corporations, however, was much smaller on a per company basis because corporations constituted a far larger proportion of the economy. The stock market impact in a world of rational actors would have been net unchanged, because listed corporations would have risen as much in aggregate as income trusts fell. But the market is not entirely rational and the average voter even less so. The Tories were reminded of the value of client politics and the wisdom of fragmenting the Canadian income tax code (deductions for bus passes, deductions for fees associated with your kids' sports, etc etc). </div><div><br /></div><div>One could look at the HST uproar in BC through the lens of client politics in two senses. One is that if BC reversed implementation of the tax, Ottawa would presumably get its $1.6 billion incentive back. Yet how many Canadians outside of BC are at all interested in having that $1.6 billion available for spending in their own jurisdictions? There is no meaningful constituency for reversing targeted spending. The other HST reality is that giving a break to corporations is generally giving a break that, by the sheer scale of the number of parties it benefits, is too shallow a benefit to any one of them in particular for any significant number of beneficiaries to lobby for it. It doesn't ultimately just benefit business, of course, since it is a general benefit for the economy, but that benefit is too diffuse to be politically valuable.</div><div><br /></div><div>In Alberta, besides some "inflation proofing" now and then there has not been any new additions to the Heritage Fund since 1986. The opposition parties have occasionally called for new additions, by having a proportion of energy revenues directed into the Fund. This is an easy demand, because it doesn't address the trade-off of spending foregone. One would think that the more obvious first step would be to just call for a stop to the raiding of the Heritage Fund, with investment returns being retained in the Fund so it could grow (this year alone Finance Minister Morton plans to move close to a half billion from the Heritage Fund to general revenues). But far from demanding that Heritage Fund returns not continue to be directed into general provincial spending, the Wildrose Alliance, which markets itself as "fiscally conservative," has been missing in action. At the annual public meeting last month, MLA Heather Forsyth, who sits on the Heritage Fund committee, had nothing to say. It was left to Liberal MLA Hugh MacDonald to challenge the government on its unwillingness to save. The previous year, Forsyth didn't even show up. The spending that MLA Rob Anderson has challenged concerns not the province's wage bill but the form of spending that is most analogous to savings, namely, infrastructure investment. And why not; - client politics holds that because infrastructure can generally be used a little bit by everyone, the political lobby in favour of it is too diffused to be anything worth worrying about if it's cut.</div><div><br /></div><div>To return to the political situation in the US, it's apparent that the country is going to have a very hard time improving the competitiveness of its public policy. Amongst the countries with the most efficient tax systems one finds many of the former Warsaw Pact states. This reflects the fact that overthrowing an old system wholesale allowed for the introduction of a new system based on the latest research. </div><div><br /></div><div>In a perfectly competitive market, there is no "economic profit," there is only "normal profit," because any economic profits are promptly squeezed by out by competitors who instantly appear. In reality, of course, there is a time delay, and the businesses that are truly successful have as their cornerstone an understanding of the <i>temporary</i> nature of economic profits. There is no more reason why the United States should be the dominant global player in 2050 that it was in 2000 or 1950 anymore than the 30 firms that make up the Dow Jones Industrial Average should be the same as 50 or 100 years ago. While the "line workers" of America, Inc. may be as innovative as ever, its management is increasingly unable to adjust.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com1tag:blogger.com,1999:blog-6897479481146623890.post-53558526040045181592010-11-23T00:11:00.010-07:002010-11-23T13:28:32.401-07:00the business of America is business?<div>One of the things that struck me about the US deficit reduction plans offered by the co-chairs of the President's <a href="http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/CoChair_Draft.pdf">National Commission on Fiscal Responsibility</a>, the Domenici-Rivlin <a href="http://www.bipartisanpolicy.org/projects/debt-initiative/about">Bipartisan Commission</a>, and Jan <a href="http://schakowsky.house.gov/images/stories/1118_Schakowsky_Deficit_Reduction_Plan.pdf">Schakowsky</a> (a "progressive" Congresswoman) is that all three plans propose taxing capital gains and dividends as ordinary income. Although the Rivlin plan would allow a trifling $1000 capital gains exemption, it not only reverses George W. Bush's tax cut with respect to capital gains (which cut the rate from 20% to 15%), it, along with the other two plans, would increase the tax rate on capital gains to beyond what it was under Clinton by moving it well above 20%. All three plans would also tax dividends as ordinary income. These plans are supposedly from across the spectrum, with Paul Krugman, for example, dismissing the plan proposed by Obama's commission co-chairs, Erskine Bowles and Alan Simpson, as an "<a href="http://krugman.blogs.nytimes.com/2010/11/10/unserious-people-2/">unserious</a>" proposal that only the "centre right and the hard right [could] agree on."</div><div><br /></div><div>That capital income should be targeted in the supposed stronghold of capitalism is both remarkable and it isn't. Having the world's highest tax rates on income from capital is superficially remarkable but further analysis reveals that the US has not been nearly as capital friendly a jurisdiction as popularly imagined for a while now.</div><div><br /></div><div>In Canada, with the exception of Quebec, <a href="http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/dvdnds/menu-eng.html">eligible dividends</a> are actually taxed at negative rate for incomes below $41 000. In Alberta, even persons making over a million a year have been taxed at less than 15% on eligible dividends (this is increasing to almost 16% for 2010 on incomes over $127 000). One must keep in mind here that dividends are double-taxed, once in the hands of the corporation and then again in the hands of the individual receiving the dividend. But this just makes the difference with the USA more remarkable. The economists in the Finance Department in Ottawa are alive to the fact that corporate taxation is amongst the most economy-unfriendly forms of taxation and that dynamic scoring indicates that cutting the corporate rate is relatively inexpensive. There has been an ongoing effort dating back to when Paul Martin was Finance Minister to cut the corporate rate when possible and effective January 1, 2011 the rate will be 16.5% (with current plans calling for 15% a year later, meaning a combined rate of <a href="http://www.fin.gov.bc.ca/tbs/tp/climate/A4.htm">just 25% in British Columbia)</a>. Like most policies that are well founded in terms of evidence, this reduction is consistent with the international trend <a href="http://www.tokyofoundation.org/en/images/A4-large_morinobu_figure4.gif">identified</a> by the OECD. The US corporate tax rate is 35%, for a combined state/federal rate over 39%, the <a href="http://www.taxfoundation.org/blog/show/26506.html">highest rate in the world</a> after (economically stagnant) Japan.</div><div><br /></div><div>To tax corporate income at this level and then whack it again when dividended out by taxing it as ordinary income under a highly "progressive" income tax regime raises the question, why wouldn't American investors take their money offshore (and themselves along with it) instead. If a company on a listed stock exchange were to announce that it would never pay a dividend, it's intrinsic value would drop to zero overnight: you can't eat a share certificate, and accordingly the only value it has is the present value of its future dividends. Investment decisions around the world utilize a NPV (net present value) analysis; the corporate tax rate reduces the numerator of that analysis, and what's left over is still stuck in the corporate form and not available to investors apart from a dividend. </div><div><br /></div><div>In response to those doubting my claim that the US income system is highly progressive, note this quote from a <a href="http://www.lisproject.org/publications/liswps/480.pdf">paper</a> by the <a href="http://en.wikipedia.org/wiki/Luxembourg_Income_Study">Luxembourg Income Study</a>:</div><div><blockquote>For the 13 countries for which it was possible to calculate income, payroll, and property tax progressivity, the U.S. has the most progressive tax structure; Sweden and Denmark are the most regressive.</blockquote></div><div>Ah, yes, those Scandinavian scoundrels. That best case scenario for Canada that I noted above whereby the corporate tax rate in BC would be 25% in 2012? Denmark is <a href="http://www.taxfoundation.org/publications/show/24973.html">already there</a>, today. And Norway's dividend tax rate is... zero:</div><div></div><blockquote><div>dividends from Norwegian companies were in practice tax free on the hands of the shareholder</div><div>- <a href="http://www.regjeringen.no/nb/dep/fin/tema/Norsk_okonomi/topics/The-corporate-tax-system-and-taxation-of-capital-income.html?id=418058">Norwegian Ministry of Finance</a></div></blockquote><div><a href="http://www.regjeringen.no/nb/dep/fin/tema/Norsk_okonomi/topics/The-corporate-tax-system-and-taxation-of-capital-income.html?id=418058"></a></div><div>Meanwhile, Norway has been rated #1 by the United Nations' <a href="http://hdr.undp.org/en/reports/global/hdr2010/chapters/">Human Development Index</a> for years now (remember how the top spot used to be a pride of point for Canada? We're now down to 8th).</div><div><br /></div><div>I've lived in Scandinavia for more than a year and have noted that while the "welfare state" there remains strong (the tuition for my academic degree there was zero), one does not encounter the anti-corporate hysteria that is so common in North America. When the <a href="http://www.oecd-ilibrary.org/taxation/oecd-tax-policy-studies_19900538">OECD points out</a>, for example, that</div><div><blockquote>Corporate income taxes appear to have a particularly negative impact on GDP per capita. This is consistent with the previously reviewed evidence and empirical findings that lowering corporate taxes raises TFP (total factor productivity) growth and investment. Reducing the corporate tax rate also appears to be particularly beneficial for TFP growth of the most dynamic and innovative firms.</blockquote></div><div>Scandinavians, and Europeans in general, are prepared to pay attention. In Canada, most people would rather listen to Bill Vander Zalm, and it isn't much different in the States. Consider who has advocated the following:</div><div><blockquote>We must be firmly committed to free trade... opposing all forms of protectionism and removing existing trade protectionist measures... We should substantially reduce trade and investment barriers... and establish an open and free global trading system.</blockquote></div><div>Recognize <a href="http://news.xinhuanet.com/english2010/china/2010-11/12/c_13603472.htm">the words</a> of the leader of "communist" China there? Meanwhile, the "leader of the free world" has assiduously avoided ever calling for free trade. Obama's recent trip to Asia was instead billed as a "<a href="http://thecaucus.blogs.nytimes.com/2010/11/05/obama-recasts-asia-trip-as-jobs-mission/">jobs mission</a>." Needless to say, the President came back empty-ended from his mission to get something for nothing. At the same time, the war of words between Germany and the US over the US government's spending spree continues. Germany's chancellor recently made the supposedly illiberal claim <a href="http://www.christianconcern.com/our-concerns/religious-freedom/angela-merkel-says-too-little-christianity-in-germany">that</a> "we have too little Christianity. We have too few discussions about the Christian view of mankind." With respect to immigration, Europe is significantly further to the right than North America.</div><div><br /></div><div>For years the policy mess in the US was masked by the country's ample natural resources and its openness. "The business of America is business," said one President. But that was before FDR. America is now turning inward. As the WSJ <a href="http://online.wsj.com/article/SB10001424052748703466104575529753735783116.html">reported</a> last month, less than 10% of Americans say free trade agreements have helped the United States, and Tea Party supporters are even more likely to say the US has been hurt by free trade than the general public. The incoming Chair of the House Committee on Agriculture, Republican Frank Lucas, wrote Obama last year to <a href="http://republicans.agriculture.house.gov/pr090225.shtml">demand</a> that farm subsidies not be cut. Besides direct payments, the US tax code is additionally chock full of subsidies that economists would call <a href="http://www.nytimes.com/2010/11/21/business/economy/21view.html">tax expenditures</a>, but in Republican rhetoric they are tax cuts.</div><div> </div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com0tag:blogger.com,1999:blog-6897479481146623890.post-9700129377301903102010-11-15T23:54:00.015-07:002010-11-16T02:09:18.395-07:00a sign-off of sorts for Alberta readersI'll probably be blogging less about Alberta affairs going forward, not least because the ground is fairly well covered by others. <a href="http://communities.canada.com/edmontonjournal/blogs/electionnotebook/default.aspx">Capital Notebook</a> is back, although the most trenchant Leg watching commentary is likely to be found at former Liberal MLA <a href="http://mauricetougas.wordpress.com/">Maurice Tougas</a>' blog. One of the things I found remarkable about Maurice's 2004 run in Edmonton-Meadowlark is that his winning campaign <a href="http://efpublic.elections.ab.ca/afEFUploadView.cfm?&ACID=208">spent less than $5400</a>. I remember a Wildrose conference in 2007 when an experienced PC Alberta organizer advised us that running an urban campaign would require $8000 and a rural campaign $12 000. With Wildrose Alliance operations now dominated by big spending federal Tories, constituencies are probably being told they need to spend $25 000.<div><br /></div><div>The fact of the matter is that the debate of interest to me is the government of Alberta's fiscal situation, and it is a debate that the average Albertan is not particularly interested in. A chasm in perspective between the "wonks" and the general electorate is not unusual of course. I agree with the Fraser Institute that Gordon Campbell is the <a href="http://www.fraserinstitute.org/research-news/news/display.aspx?id=16737">best fiscal manager</a> of the 10 provincial premiers, but Campbell's approval ratings are in the single digits, a level so low that the BC premier could not continue to govern (he announced his resignation earlier this month). But there isn't much wonk interest in Alberta's finances either. Why? Because the province has simply not been compelled to face the issues that most other North American jurisdictions have begun to wrestle with. A review of the cash on hand held by US states indicates that a large chunk is held by just two: Alaska and Texas. These two states having something in common with Alberta, of course: significant oil and gas royalties.</div><div><br /></div><div>With a full third of its budget historically being funded by natural resource-related revenues, Alberta can afford to maintain inefficient policy and carry on with an air of self-satisfaction, taking in the spectacle of others grappling with their emerging financial problems with an air of bemusement. The typical Albertan has accepted the convenient explanation that his province's prosperity is due to hard work, a pioneering spirit, and "conservative" values in general.</div><div><br /></div><div>This "character" myth, is of course, exactly that, a myth, but it would get rather tiring for me to point this out again and again. Over the past couple of years I've essentially said what I have to say: save and invest more, spend less, and consider how budgeting decisions are made as opposed to just the decisions, which is to say wake up to the influence of unions, especially public sector unions, on the public policy process. One can only write so many jeremiads before one has pigeon-holed oneself as, well, a Jeremiah. The more interesting observation I wish to make here is that avoiding a calamitous future would involve a shift in public perception and attitudes that would extend far beyond Alberta.</div><div><br /></div><div>Consider, for example, trends in healthcare spending. Below is a graph of the annual growth rates in health expenditures in constant 1997 dollars:</div><div></div><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizU4eYt_kpv0XY6cw6WwB9ItwzmqD2BS_g4XcWzb4S9kWuajdw8l16rI0u2gHOtmW4YZitXfohdPEfEGqTpgBbDw9kR16GG14MjVpvtTS7CYclQ4CVB5w2FnKRa2iGeeCaShhtv3chfsJs/s1600/health+expenditures.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 171px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizU4eYt_kpv0XY6cw6WwB9ItwzmqD2BS_g4XcWzb4S9kWuajdw8l16rI0u2gHOtmW4YZitXfohdPEfEGqTpgBbDw9kR16GG14MjVpvtTS7CYclQ4CVB5w2FnKRa2iGeeCaShhtv3chfsJs/s400/health+expenditures.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5540037770827760914" /></a><br /><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br />Alberta readers might look at the 1993 to 1996 anomaly and reckon that they see the handiwork of the early Klein. But in fact this is a <i>national</i> graph produced by the <a href="http://www.cihi.ca/CIHI-ext-portal/internet/EN/Home/home/cihi000001">Canadian Institute on Health Information</a>. The following three graphs from the same source illustrate health expenditure per person in constant 1997 dollars, with the upper line in each representing public expenditure and the lower line representing private expenditure:</div><div><br /></div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0nD14ZlEHpwUPDdh5GAUZZA1raQh62jTUVNb1YuSEFqZxAm7SLnraW_8TsUs227IyaxW3yGyEXEgrtoEyn9Su_4KVANek-b_dBeyetb_fkjF4uLpFaVgy10YB9uU3AcHAmPydZAjZl0MM/s1600/Alberta+health.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 257px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0nD14ZlEHpwUPDdh5GAUZZA1raQh62jTUVNb1YuSEFqZxAm7SLnraW_8TsUs227IyaxW3yGyEXEgrtoEyn9Su_4KVANek-b_dBeyetb_fkjF4uLpFaVgy10YB9uU3AcHAmPydZAjZl0MM/s400/Alberta+health.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5540044289805607298" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw-zgsAqMGhEUq-fo0lumxkaM8j5gsnGCNHBh-u8fFk33Hc68_XpTwvYAe3XGzeBiq1kmxaqNBl83RhRuG9VxOWJn-3hlJKPUT2hX8kMShuFK476slLGdGOshbJo5BYtTjWCXLHU0GhyphenhyphenuU/s1600/Saskatchewan+health.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 258px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw-zgsAqMGhEUq-fo0lumxkaM8j5gsnGCNHBh-u8fFk33Hc68_XpTwvYAe3XGzeBiq1kmxaqNBl83RhRuG9VxOWJn-3hlJKPUT2hX8kMShuFK476slLGdGOshbJo5BYtTjWCXLHU0GhyphenhyphenuU/s400/Saskatchewan+health.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5540049196407642050" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjZ3Dr_WUq3X1pdRjFwryqXzm1i981rxWRh-CC6qF2EZ-BY7YpLjcoHACDP3DLzG02sZMTczekQYmWyjej1cSmzooictOuH1Ov4ABetcpnU4jR9BY-rG05juQYyaIVCx1YKVY_fyJ7Nt5I/s1600/Ontario+health.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 256px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjZ3Dr_WUq3X1pdRjFwryqXzm1i981rxWRh-CC6qF2EZ-BY7YpLjcoHACDP3DLzG02sZMTczekQYmWyjej1cSmzooictOuH1Ov4ABetcpnU4jR9BY-rG05juQYyaIVCx1YKVY_fyJ7Nt5I/s400/Ontario+health.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5540049376985664130" /></a><br /><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>One can make a couple of observations about these graphs. One is that the target of limiting healthcare cost growth to GDP growth+1%, as targeted by a draft proposal released by the co-chairs of President Obama's deficit commission, is not unreasonable. Even GDP+0% would not be a flat line in the above charts, because a flat line would result from holding spending growth to inflation and population growth and GDP growth will exceed that (if it didn't, real GDP per capita would not rise over time). The other observation, more germane to this blogpost, is that while the 90s dip is more pronounced in Alberta's case, for all three provinces we see an acceleration in constant dollar expenditure per person from about 1996, creating a notable inflection point given the declining or steady level trend of the previous four years. 2009 and 2010 suggest that public spending may decelerate for Saskatchewan and Ontario relative to Alberta, but these data points are forecasts (and so represented by white dots).</div><div><br /></div><div>Here's one more chart, which displays spending in the United States by all levels of government as a proportion of GDP:<br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://www.usgovernmentspending.com/usgs_line.php?title=Total%20Spending&year=1950_2015&sname=US&units=p&bar=0&stack=1&size=l&col=c&spending0=23.95_22.38_27.88_29.02_29.27_26.70_26.47_27.21_28.84_28.77_28.74_30.25_28.94_28.71_28.50_26.96_27.45_29.80_30.47_30.08_31.00_31.49_31.36_29.78_30.23_33.62_34.00_32.91_32.02_31.58_33.72_33.64_36.25_36.31_34.44_35.48_35.71_35.09_34.73_34.94_36.01_37.22_37.04_36.31_35.38_35.54_34.69_33.77_33.24_32.65_32.56_33.38_34.75_35.28_34.78_34.79_35.06_34.98_36.94_42.32_43.85_43.88_42.17_41.93_42.20_42.43"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 218px;" src="http://www.usgovernmentspending.com/usgs_line.php?title=Total%20Spending&year=1950_2015&sname=US&units=p&bar=0&stack=1&size=l&col=c&spending0=23.95_22.38_27.88_29.02_29.27_26.70_26.47_27.21_28.84_28.77_28.74_30.25_28.94_28.71_28.50_26.96_27.45_29.80_30.47_30.08_31.00_31.49_31.36_29.78_30.23_33.62_34.00_32.91_32.02_31.58_33.72_33.64_36.25_36.31_34.44_35.48_35.71_35.09_34.73_34.94_36.01_37.22_37.04_36.31_35.38_35.54_34.69_33.77_33.24_32.65_32.56_33.38_34.75_35.28_34.78_34.79_35.06_34.98_36.94_42.32_43.85_43.88_42.17_41.93_42.20_42.43" border="0" alt="" /></a></div><br /><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br />Note the decline from 1991 to 1999. While there is variation between states and provinces, the overall story is that fiscal conservatism was a North America-wide phenomenon in the 90s. One can draw two conclusions from this. One is that fiscal debates in any given state or provincial legislature do not occur in isolation from the larger "culture." The other is that if most of North America is overspending, any given sub-national jurisdiction has likely succumbed to the same trend to at least some degree.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com2tag:blogger.com,1999:blog-6897479481146623890.post-9860191633181602902010-11-07T00:35:00.013-06:002010-11-07T16:59:15.002-07:00further to the lastOne regrettable consequence of my last blogpost is that a P"C" party activist or two seems inclined to think my dissatisfaction with the Wildrose Alliance somehow makes the government party a more attractive option. Let's be clear here: if there is a problem with Wildrose people making getting elected an end-in-itself instead of a means to an end, it remains a bigger problem yet with most P"C" party people. As longtime Leg watcher Marc Lisac observed in 2004:<div><blockquote>[W]hy would anyone with a solid position in the community want to run for the opposition? The prize for election is putting up with casual insults in question period, being largely ignored by the media, watching government backbenchers earn much more money by virtue of being appointed to this agency or that board, and knowing that one's future employability outside politics is likely being impaired. The most attractive choice is to fight for a nomination in the governing party.<br /><br />You have to be a saint to run for the ragged, perpetually debt-ridden shells that pass for opposition parties in Alberta. A saint, or someone with the character of a stubborn, defiant buffalo facing directly into a stiff wind coming off the mountains. Most people in public life here are neither. Contrary to the stereotype of the defiant individual, the province is full of people who take the easier path and join the party (literally and figuratively).<div></div></blockquote><div><br />There is accordingly a context to my issues with Wildrose. That context includes that fact that the governing party has to take a lot more responsibility for the spending spree of the last decade than the opposition. Also, even if the Wildrose caucus successfully led an effort to kill off the restriction on teachers' right to strike, for some other planks like the right to not associate with a union and the secret ballot, it was "close but no cigar" in terms of getting them eliminated from the policy book. With the P"C" party, in contrast, you have a party that, as a government, introduced legislation that had clauses like section 29 of the Labour Code: "[e]mployees to be union members."</div><div><br /></div><div>I have regularly returned to the issue of unions because I think how a politician is inclined to deal with this interest group is a far more revealing indicator of fiscal conservatism than nebulous talk about cutting back on spending. Remember how the unions howled at the Klein cutbacks in the mid-90s? What has changed such that spending restraint today wouldn't involve a confrontation with the unions? Premier Stelmach called the limiting of teachers' right to strike which Wildrose used to stand for "draconian," but in New York State ALL public employees are banned from striking ALL the time by <a href="http://www.perb.state.ny.us/stat.asp#str">section 210</a> of the Public Employees Fair Employment Act, more commonly known as the Taylor Law. Yet New York unions are still in the saddle. An expert panel hosted by the New York Times titled "Can California and New York be saved?" returns repeatedly to the idea <a href="http://www.nytimes.com/roomfordebate/2010/11/04/the-jerry-brown-andrew-cuomo-connection/arm-twisting-in-albany">that</a> New York's new governor "has to steel himself for the long run and be prepared for the wave of ads from unions claiming the sky is falling." In Illinois where <a href="http://www.suntimes.com/news/politics/1769029,CST-NWS-pension14.article">union muggings of the taxpayer</a> are, if anything, even more egregious than in Albany or Sacramento, the Republican candidate for governor collected more than 1.7 million votes last week, losing by a thread, yet challenged the unions <a href="http://www.youtube.com/watch?v=6xPeLWrLssI">directly</a>. The point being here that "draconian" is relative. As I noted in my last post, although Alberta supposedly has much in common with Rocky Mountain states like Idaho, the province <a href="http://www.policystudies.ca/documents/Balancing_workers_rights_and_union_privileges.pdf">allows closed shops</a> when even the chair of the Swedish Building Workers' Union has <a href="http://www.eurofound.europa.eu/eiro/2003/11/inbrief/se0311101n.htm">said</a> "closed-shop clauses [are] old-fashioned and [are] being removed" <i>in Sweden</i>. (As an aside, I have lived in Sweden more than a year and am a fan of much of the Scandinavian system, which in many respects is not as "left wing" as North Americans presume, e.g. a lower corporate tax rate than the UK and the USA, and perhaps the world's most radically free market <a href="http://www.economist.com/node/11535645">in schools</a>, schools that, by the way, <a href="http://www.thelocal.se/29528/20101010/">privilege Christianity</a> in the curriculum). </div><div><br /></div><div>As I said before, the key problem is "not how much will be going to the unionized public sector per se" but how Alberta (and North America in general) decides how much is too much. Imagine an audience with some politicians on a stage in front of them. Now randomly pluck one "ordinary person" from the audience and sit them on a stool on the stage. Now invite the politicians to talk about how much that person should be paid and then vote, as an audience, for the politician who has said the most convincing thing and, by this mechanism, determine the pay. That the politicians will engage in a bidding war to pay the most should be as obvious as the fact that studio audiences invariably root for a game show contestant to win spectacular amounts of money. As much of a circus as this hypothetical scenario would be, reality is considerably worse because it isn't nearly as transparent: collective bargaining agreements are not conducted on public television.</div><div><br /></div><div>Now having said this, if anyone should ask why I quit the Wildrose Alliance, it is not over a policy difference. Nobody gets all the policy they want out of a political party that represents a significant proportion of society. It is rather the way the party made a move that wasn't anti-any particular policy I favoured, but anti-policy period. </div><div><br /></div><div>For whatever reason, an elected provincial politician, Doug Griffiths, wanted to talk policy, not politics, and Wildrose Executive Director Vitor Marciano (with the possible agreement of others) decided to try and make money for his party off of the uninformed grassroots using that very fact. <i>Talking policy instead of politics is what my whole motivation has been since I left Ottawa's policy shops.</i> Politics is a means to an end. If the end is to try scare politicians like Griffiths out of saying what he has been saying, I'm working for the wrong team. It's as simple as that, really.</div><div><br />Former minister Allan Warrack's comments about bringing an HST to Alberta <a href="http://bit.ly/cYPI0I">on Alberta Primetime</a> last Monday hit almost all the bases in terms of a concise defence of the idea. <i>The segment quite likely would have never occurred, and Professor Warrack thus not have been given a soapbox, had Griffiths not made the effort to push the debate into the general culture</i>. Wildrose not only failed to play enabler with respect to bringing a conversation to Albertans that I've made it something of my personal mission to bring, Wildrose actively contributed to trying to marginalize the conversation as unacceptable.</div><div><br /></div><div>British Columbia doesn't have anything like Alberta's royalty revenues yet, as of this coming January, the corporate tax rate is no higher (10%) than in Alberta and a person earning $45 000 would pay almost $1000 less in income tax in BC than in Alberta. BC's tax on carbon does not bother me at all since I haven't owned a car for more than 8 years and the policy makes it that much less likely that BC would be targeted by a hostile foreign public relations campaign. This while BC, population 4.5 million, spends <a href="http://ca.news.yahoo.com/s/reuters/100914/canada/canada_us_britishcolumbia_1">$40.6 billion</a> and Alberta, population 3.7 million, spends <a href="http://www.cbc.ca/canada/edmonton/story/2010/08/25/alberta-fiscal-update-budget.html">$39.3 billion</a>. The BC deficit is furthermore far more manageable. Calgary-based George Koch, <a href="http://albertaventure.com/2010/10/three-kings-of-deficit-cutting/">writing</a> in Alberta Venture in October, noted that "we Albertans seem a complacent lot, addicted to our government entitlements," and lamented the lack of leadership, observing that "[f]or the wilful leader, public support is a bank to draw on rather than just a wave to ride." With the exception of people like Doug Griffiths, Alberta's politicians all seem to be out surfing.</div></div><div><br /></div><div>UPDATE:</div><div><br /></div><div>Apparently I'm <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/11/what-policies-should-a-canadian-economists-party-promote.html">not alone</a> in terms of general frustration. <a href="http://twitter.com/#!/MikePMoffatt">Mike Moffat</a> from Western, <a href="http://twitter.com/stephenfgordon">Stephen Gordon</a> from Laval ,and <a href="http://twitter.com/acoyne">Andrew Coyne</a> have been referring to each other's work for a while now and they are all unimpressed with the direction of Canadian politics.</div>Brian Dellhttp://www.blogger.com/profile/15277892651810185583noreply@blogger.com4