Wildrose AGM review Part 5 - caucus proposals

The "caucus" submitted several policy proposals to the membership, and most of them sought to soften policies that were perceived as "harsh".

The first caucus proposal to come up for a vote sought to delete the plank calling for a striking of section 3. Presumably (there was little explanation here) what concerned caucus here is that prohibitions against discrimination would be weakened should the section simply be struck (there is language to the effect of "indicates discrimination or an intention to discriminate" in the section). The question for me, however, was why there was any need to finesse this policy plank when even the Sheldon Chumir Foundation, which draws its name from a former Liberal MLA, thinks a simple repeal of section 3 acceptable.

Of greater concern to me, however, were the caucus calls to compromise the party's commitment to economic freedom. The caucus called for a deletion of the clause allowing individual workers to freely choose their membership in labour organizations and deletion of the clause protecting workers' "democratic right to a secret ballot vote" (card check, here we come!). These clauses were to be replaced with

A Wildrose Government will review labour laws to ensure fairness for all workers whether employed in union or non-union settings.

Readers of this blog may recall that before the AGM I objected to the "fairness" language, but the edition of the Economist that came out during the week after the AGM expresses the objection to "fairness" much more clearly and convincingly:

the fact that everybody believes in fairness is a clue to what’s wrong with the notion. Like that other warm-blanket word, “community”, it signals limp thinking. What exactly is “fair” about restricting trade, for instance? Or “unfair” about letting successful people in business or other fields enjoy the fruits of their enterprise without punitive taxes? ...

To one lot of people, fairness means establishing the same rules for everybody, playing by them, and letting the best man win and the winner take all. To another, it means making sure that everybody gets equal shares.

Those two meanings are not just different: they are opposite. They represent a choice that has to be made between freedom and equality. Yet so slippery—and thus convenient to politicians—is the English language that a single word encompasses both, and in doing so loses any claim to meaning.

Fairness is fudge. This newspaper will have none of it. We reject the wide, woolly notion of fairness in favour of sharper, narrower words that mean what they say, like just or cruel.

The Economist "will have none of it". But the Wildrose caucus evidently can't get enough of it, because they wanted yet another clause in the Labour section deleted and replaced with "fairly" (albeit this time with only union members being identified as those who needed to be "treated fairly"!). When the membership agreed with the caucus on that second proposal the party leader said that the vote illustrated the party's "sophistication." Thus did the Wildrose Alliance give the Economist a lesson in subtle and urbane thinking!

If the caucus had just argued that Premier Stelmach was right when he claimed that denying a right to strike is "draconian", even when a strike would deny children their right to an education, that would have been one thing, but Rob Anderson called on the membership to "trust the caucus", as if only a Leg grounds insider could really understand. Both Anderson and Heather Forsyth also wanted to turn several other policy planks that teachers' unions don't like into uncontroversial platitudes, and instead of arguing that, for example, the social science evidence indicates that "'school choice' legislation" is a bad idea, Anderson insisted that "anything that suggests 'vouchers' is a red flag." Just why a showdown in the bull ring must be avoided was not explained. As it was, I agreed with caucus and voted for some measures that watered down demands for things like testing because I have come across conflicting research on the topic. I agreed with Heather Forsyth that the party should be cognizant of the fact that eliminating the policy of social promotion denies parents a right. We should only have planks on matters on which we have done extensive research. But expert opinion did not seem to be of as much interest to caucus as the opinion of powerful lobbies. Anderson called on the membership to heed various "stakeholders" and, if I recall correctly, Forsyth opposed every measure that would hold teachers accountable for performance.

The problem with this "stakeholders" talk is that it means that when it comes to the budget, should the party try to take away a chair before the music stops from those who are making claims on taxpayer resources, the civil service unions will not be the ones left standing. Given Danielle Smith's assertion that raising royalties was the "single worst decision any premier of our province has ever made", it's fair to expect that the oil patch won't be left standing when the music stops either. There isn't a political party in Canada for which healthcare spending is not a sacred cow. So who will get the short straw, or will no one get it, such that the government spending just rolls on as it did when PC finance minister Iris Evans responded to questions about ballooning spending by asking "where would you cut?" Maybe all the Wildrose words about fiscal conservatism will convert themselves into million dollar bills so that a "stakeholder"-pleasing budget surplus can be painlessly generated?

Given how little emphasis the party has placed on corporate taxation since the time when I was a candidate in 2008, I suspect that businesses not directly involved in energy extraction will get little relief from a Wildrose government. The Wildrose leader has already complained that "big corporations" are getting too much from the current PC government (albeit within a specific context where I agree). At the AGM the party membership voted to water down a clause that "a Wildrose Government will increase research and development", a move that I saw as penny wise and pound foolish since R&D and post-secondary education are broadly recognized by economists as representing the biggest positive externalities, i.e. the areas with the best argument for receiving taxpayer support. A growing economy means growing tax revenues, and economic growth is driven by innovation and investment. Who invests in property, plant, and equipment? Corporations. Unions, in contrast, consume, and not only do the incomes, benefits, and pensions they draw represent consumption but they represent a share of provincial income that was acquired by means of anti-competitive practices. Just because they are applied to the supply of labour doesn't make it any less the application of monopoly power.

Am I out of step with the mainstream in my views here? Absolutely. It is the prevailing wisdom of the mainstream, the accept norm of recent years, that is off track. Peoples' preference for living for today and securing their own benefits and/or exemptions from taxpaying responsibilities at the expense of the public purse is creating a steep bill for the next generation. Bear with me while I quote at length from the Economist again:

Rising government debt is a Ponzi scheme that requires an ever-growing population to assume the burden—unless some deus ex machina, such as a technological breakthrough, can boost growth. As Roland Nash, head of research at Renaissance Capital, an investment bank, puts it: 'Can the West, with its regulated industry, uncompetitive labour and large government, afford its borrowing-funded living standards and increasingly expensive public sectors?' ...
In the past 100 years the moral battle has moved in favour of the debtors. Bankruptcy is no longer stigmatised but simply regarded as bad luck. When consumers borrow beyond their means, the blame is laid on lax lending practices rather than irresponsible borrowing. ...
Clearly a society built on consumption will have to pay more attention to saving. ... The battle between borrowers and creditors may be the defining struggle of the next generation.

On the rare occasions when I disagree with the opinion of the Economist, it is because the magazine has gotten too close to idealistic libertarianism and too far from realistic conservativism. When the publication takes such a conservative approach as to reference the long term "moral battle," you can be assured I am 110% in agreement. The #1 candidate for austerity ought to be the public sector, yet our politicians seem to insist on the necessity of further indulging a section of society that has sailed through the recent financial crisis/recession while the private sector has suffered. Even California is starting to appreciate that something has to be done; as the NY Times reports

For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession. Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget. ...
The state pension system is a money sinkhole...

This is the crisis of our age. If the music has not yet stopped, it is going to, and not just one chair but several have to be taken away.

I would more inclined to give Rob Anderson the "trust" he asked for if he had not spent the last provincial campaign trying to further expand the legislative presence of a government that had been increasing spending at double digit rates. Back in January of this year I expressed some concern about the floor crossings, not because I was fundamentally opposed in principle but because there appeared to be too much accommodation of the crossers. Liza Yuzda quoted Danielle Smith as saying holding by-elections would mean the new caucus members could "be without an income for six months." Now I could sarcastically say "cry me a river" but I wanted to take, shall we say, a "sophisticated" stance on the issue at that time. When Rob Anderson took to the platform last Saturday to complain about his expected remuneration after Link Byfield had just presented the conclusions of his "MLA pay and perks" task force, my opinion on the terms of the floor crossings, or the absence thereof, became a lot less sophisticated and a lot more simple. Link had essentially put some of his political capital on the line at the beginning of this year when he indicated that he believed the floor crossings came about for reasons he had no problem supporting, yet here Anderson follows up Link's one appearance on the AGM platform to conspicuously fail to support Link's work.

The capstone to my disillusionment was set when, near the end of the AGM, someone involved in operations told a reporter that every constituency has a membership count of 140 or more. I don't have the latest numbers and am not at liberty to disclose them but I do know that this claim is certainly false. As far as I was concerned, Edmonton Journal reporter Archie McLean was being deliberately misled, and even if the Journal's editorial page hasn't been exceedingly fair with us, Archie certainly has been. The fact that Archie wasn't actually asking for that information is beside the point. Given that it is also the case that constituency organizers have quit because of conflicts with this person, were I in charge I would have deemed giving inaccurate information to the media grounds for firing. Given that the daughter of an Edmonton Decore organizer was fired from staff for no grounds or explanation at all (according to my information), it's not like the party can't do it. Recall that the party's office manager, Heather McMullen, was let go for allegedly "speaking out of turn" at the time of the floor crossings.

I was advised by a Wildroser after the AGM that it isn't the same party that I put time and money into in 2008. Of course. But going from the fringe to the mainstream need not entail getting offside with sound policy like that articulated by the Economist, or Jack Mintz, or the economic consensus which has little time for monopolies generally and unions specifically. We do not need every vote. Once the party starts thinking it does, it is hardly different from the P"C" party. When I talked to the new VP Policy last weekend before he was elected about a policy I thought fairly straightforward and a powerful political tool for maintaining fiscal conservatism (by reducing the revenue windfalls that seem to inevitably strengthen the bargaining power of interest groups wanting taxpayer money), namely hedging, I was advised that the hedging concept, or at least its implementation, was likely too abstract. My experience of the AGM suggested that even if sound policy was passed, the caucus is likely to want to water it down if powerful lobbies oppose it with the end result being that caucus' discretion is preserved. Where the party policy book is silent, such as on whether to support a national securities regulator, the caucus does not seem to have felt a need to be less than strident in taking a position in its press releases.

My multi-part review of the AGM has become more critical as it went along over this past week and has reached a climax with this post, as I have pointed the finger at caucus (Hinman excepted) for being too accommodating of insider lobbies and/or their own political and financial interests to maintain my confidence in the party's real, as opposed to rhetorical, commitment to enforcing fiscal conservatism and, indirectly but in turn, at the leadership for being too accommodating of caucus. The accommodation started back in December, if not before, but would not have reached what I consider an intolerable level had events at the AGM not reinforced my suspicions about which way the wind was blowing.

The AGM was not hijacked by the NDP - don't get me wrong - but neither was the old Reform party hijacked by the NDP; it was rather compromised to the point that it led to a government more centrally controlled (prorogue, anyone?) and fiscally loose (anyone for some Andrew Coyne opinion?) than the Liberal government it replaced (the Harper government has yet to freeze public service wages like the Liberals did). I got off the Tory train several years ago, when it became clear what the direction was. The Wildrose party seems to think that Stephen Harper has shown the way, and indeed he has, but to government, not to principled fiscal conservatism or to the post-partisanship that would ease voter alienation. Ironically, the very hardball political tactics that got the federal Conservatives to a minority government are what is preventing them from ever getting a majority government. We need to play hardball, all right, but with the root causes of the fiscal crisis that looms for developed country governments, a key one of which is the demands of the public sector unions and assorted lobbyists.

Wildrose AGM review Part 4 - Alberta Constitution, financial regulation, gun rights

One of the first policy planks to come up for a vote called for an Alberta Constitution. A lawyer (or law student?) helpfully pointed out this could well end up playing a similar role to that of the Charter of Rights and Freedoms. As such, it would serve to limit the discretion of the elected legislature. The membership ended up voting for this measure, but later on voted for a philosophically opposite measure by deleting a clause that called for a referendum before invoking section 33 of the Charter (the Notwithstanding Clause), thereby handing discretion for whether to "opt out" of applying a provision of the Charter within Alberta back to the legislature. A sponsor of the measure to delete the requirement for a referendum when using s. 33 claimed that there would otherwise have to be a referendum every 5 years, but in fact that is only true under an unreasonable interpretation of the Wildrose policy clause. There is nothing in Canadian law which would preclude a provincial legislature from holding a referendum once, and the legislature interpreting that as supporting, say, a 50 year mandate instead of 5, and accordingly renewing sans referendum the use of s. 33 ten times over that 50 year period (every 5 years as is required by Canadian law).

I supported the use of section 33 without holding a referendum and voted against bringing in an Alberta Constitution primarily because I am a conservative as opposed to a libertarian. At the heart of our current problems is not too little reference to rights but too little reference to responsibilities. An Alberta Constitution, like all forms of legislation that are intended to be superior to the legislation produced by a legislature, would restrict the power of the majority (presumably) in the name of protecting the minority. The net result of this is provide a means of legal redress against the coercive power of norms. If the norm is to not engage in a certain behaviour, by enshrining a constitutional right to engage in the behaviour, deviants can sue to preserve their right to deviate. That's all well and good in theory, but in practice norms are what hold society together and minimize the development of anomie. The Charter of Rights and Freedoms only works in a liberal / libertarian direction opposed to conservatism because of its fundamental nature: it is not a "Charter of Responsibilities". While I grant that an Alberta Constitution could include rights that conservatives would normally support as part of an alliance with libertarians, like property rights, having experienced life in 80-odd countries and studied law and society for several years I am convinced that what ultimately protects a "right" is a society's norms, not what is written in its law books. Whatever a country's constitution might say, it is going to be interpreted in a way that is consistent with the prevailing culture of that country and the mentality of its people. North Korea is formally known as the Democratic People's Republic of Korea but in reality it is one of the least democratic jurisdictions in the world. An Alberta Constitution could ultimately make it more difficult to take necessary collective actions like creating budget surpluses, since it could create negative rights to not be taxed, positive rights to government services, or both. You might believe that the less collective action the better, but note that collective action is not necessarily government action. Whatever one's opinion on gay rights, for example, it is difficult to deny that the primary objective for those who used the Charter to advance gay rights was the erosion of the social norm than found same sex relations deviant. Government's role was really just incidental, since there was nothing stopping same sex couples from solemnizing their relationships before friends, family, and/or clergy. "Official" government recognition was important not for the piece of paper it involved but the message that was sent to the general public. Acceptance by society, as opposed to some formal government institution, was the most important goal.

Now it is true that an Alberta Constitution could enshrine things like "a marriage consists of one husband and one wife" but enshrining norms in legislation that is superior to elected legislatures is an abuse of power. Enshrining (true) rights at least has a rationale revolving around limiting majoritarianism. Enshrining whatever happens to be supported by the majority at a particular point in time (as reflected by the opinion of an elected legislature) as unchangeable for future majorities is to engage in unjustified exceptionalism. What is so special about today's norms that some of them should receive constitutional status? There has to be some sort of timelessness argument, and it is because I believe very very little is truly timeless than I oppose charters and lengthy, wide-ranging constitutions. Actually, I should correct that saying that I believe there are a number of timeless transcendent values but I am not inclined to force others to accept them by accepting my view of a constitution over theirs. Leave it to democracy. Choose conservative humility about what constitutes social justice over liberal arrogance. Constitutions and Charters take power away from democracies and hand that power to the framers of constitutions and charters. If an Alberta Constitution took power away from the federal government, I would interested in supporting it but, of course, an Alberta Constitution could control only the Alberta Legislature, not the Canadian Parliament.

Three policy proposals that came up later arose in a sequence and I ended up approaching the microphone to speak to all three. Two concerned labour and one concerned securities regulation. I'll address the labour matters in a subsequent post since otherwise this blogpost will be absurdly long. I spoke out against the proposal titled "Securities Act" because it just added clutter to the policy book. The policy planks should bind elected MLAs (and the party executive / leadership?) and this proposal didn't limit discretion at all. Gut securities regulation? Arguably OK because the proposed clause said the party supports greater protection for sellers of securities (against whom if not the buyers of securities, who would only have a positive action against the sellers if the law gave them one?). Increase the level of securities regulation? Just as defensible because the clause also called for greater protection of buyers of securities. A speaker in favour of adopting the policy plank made reference to the financial crisis, but I would refer readers to what the Economist wrote about the financial crisis just within the last day: "Though the financial crisis was global, it originated in America’s uniquely fragmented financial system, overseen by a patchwork of federal and state regulators." If the USA has a "patchwork of federal and state regulators" what does Canada have? Yet continuing or even increasing the "patchiness" of regulation in Canada seems to be exactly what the Wildrose leadership / caucus has in mind when it so intensely opposes a single national regulator. The Alberta Securities Act and Regulations is something like 3 inches think. It was my fattest statute book when I was in law school. Now times that by 13 for 10 provinces and 3 territories and call me when you are done reading, because only then have you mastered securities regulation throughout Canada, which represents, at most, 3% of global capital markets.

Were the party to adopt a plank like,

The Wildrose Alliance will use Alberta's influence over a national securities regulator to attempt to ensure that only financial derivatives listed on public exchanges may be traded in Canada

one might actually have something that got at what caused the crisis and helped prevent a future one. As that same Economist article notes, "[under the Dodd-Frank Wall Street Reform and Consumer Protection Act] Most derivatives that now trade dealer-to-dealer will be traded on public exchanges. That will lessen the risk that one dealer’s failure brings down others." Why is the risk reduced? For two main reasons. The first and most direct is that exchanged traded products are marked to market, usually daily, such that if one's counterparty defaults, the default is on just one day's worth of margin, whereas if the product were off-exchange, days, months, and perhaps even years' worth of a position going against the counterparty could have built up, leading to a massive credit overhang. The second is more structural, and goes to the transparency of the system. As the Globe and Mail reported on June 30 in a story titled, "Ignorance of derivatives spurred AIG fall",

As markets slid toward chaos, [AIG and Goldman Sachs] quarrelled bitterly over what obscure derivatives were worth, current and former executives testified Wednesday.
Their testimony casts light on what has long been one of the murkiest episodes in the broader meltdown.

Most Wildrosers support free markets primarily because they are free. As an economist, I primarily support free markets because it is generally the case that free markets make fundamental price values more transparent (government bureaucracy obscures the state of true demand and supply). But in the case of derivatives, which, as their name suggests, derive their prices from more fundamental prices, they make the fundamental economic signals more obscure. An off-exchange derivative is especially obscure because it is a tailored, non-standardized product requiring a unique valuation.

At the end of the day, neither of these policy planks, the Alberta Constitution nor this "Securities Act" plank, were especially consequential in and of themselves. With respect to the Constitution, what will matter is what is in it, not whether it exists or not. And the Securities Act plank didn't say anything. One could argue that the proposal to add a clause after "a Wildrose government will entrench individual property rights" stating "ownership of firearms is a form of property rights" would have been consequential (had it passed) but I don't think it would have been of great import in any case aside from optics (meaning voting just on one's view of the optics was entirely appropriate). It really just said what should be obvious: if one owns a gun one owns a gun. Governments violate individual property rights all the time by taxing individuals; it is just a question how much property the individual is left with after the tax man departs. What would matter was how the proposed policy plank was interpreted, and on that count I voted against it because the context seemed to be that of raising the right to own a gun to the level of, say, the right to due process, i.e. beyond mere property right. The debate on the subject helped turn votes against the proposal, I suspect, since the respected Link Byfield spoke out against and speakers in favour used implausible and/or extreme rhetoric, e.g. "a man without a gun is a slave (a man with a gun is a citizen)." As it was, a Firearms section which contained a lot of pro-firearms language was added to the policy book later, and the presumptive reason why that passed and this first proposal didn't was because the later proposal was in a context that was more appropriate to gun rights being on the level of presumptively respected but practically regulated property rights than on the level of inalienable and absolute personal rights.

So what did really matter, in my view? The provisions that were union-related, for reasons I will explain in my my next post.

Wildrose AGM review Part 3 - Walter Wakula defeated

Before I launch into a review of the policy, which will be part 4 of my review, I'll make another comment about the executive election and, before that, try and revisit the point I was trying to make about the income trust taxation decision by asking readers to consider another possible example, which is to consider the case of the Harmonized Sales Tax reform being adopted by BC and Ontario.

Where is the argument in favour of the HST coming from? Not only are the governments of BC and Ontario in favour, but so are the feds (both the Conservatives AND the Liberals). If the "people" are so overwhelmingly opposed, how can it be that there is even any debate about implementing the HST? You may currently be convinced that the HST move (which primarily shifts taxation from corporations, which invest, to consumers) would be as dumb an idea to you if you were Alberta's Minister of Finance as it is to you now as a member of an opposition party. But we have two provincial parties (and two federal ones as well, really) who seemed to have taken a more favourable view once in government. Whatever one's opinion on the matter, surely it would useful to try and find out just why this is.

Before jumping to any simple conclusions, I would note that the NDP is opposed to the HST both provincially and federally. In March of 2008, Ontario Premier McGuinty said,

What the Conservatives are asking us to do is to cut corporate income taxes – those are taxes on profitable corporations – by $2.3 billion… That definitely means closing hospitals, firing nurses, cutting education.

and in September of 2008 McGuinty's Finance Minister Dwight Duncan declared that

We don't agree with Mr. Mintz…Our taxes were the ones that were recommended to us by Ontario businesses, not by Alberta academics. That old neo-conservative attitude didn't work.

One could believe that McGuinty and Duncan flip-flopped after making these remarks because they have weak moral characters. But is it not also possible that Professor Mintz's argument for the HST was fundamentally sound such that this argument eventually came to prevail with reasonably-minded statesmen?

What we should all be able to agree on is that both the BC and Ontario governments should have been more upfront about the HST earlier. Perhaps Wildrose could end up in the same position of misleading voters if its policy decisions are too summary?

I'll now make one more follow-up to my last blogpost, and that's to note with some regret that Al Napier defeated Walter Wakula for southern director. Walter has more than 25 years of senior executive and corporate directorship experience and has served on the Senate of the University of Calgary. He also contested that Calgary West federal Conservative nomination against Rob Anders, whose resume prior to being elected as MP primarily consisted of acting as a professional heckler on behalf of the Oklahoma Republican Party. Anders' most recent claim to fame is to instruct our Canadian troops, "when in doubt, pull the trigger." According to the CBC, "Anders' message did not sit well with his constituents in Calgary West." Of course, the constituents of Calgary West could have had Walter Wakula as their MP, but it is not particularly easy to present that choice to the electorate when the federal Conservative party rigs the process. The Wildrose party had an opportunity here to put Walter on our provincial executive, and unfortunately the membership declined (I should note there that members from Edmonton could not vote for southern directors, just as Calgarians could not vote for northern directors). Although Walter was among the very first to get involved with the Reform Party, and has developed solid conservative credentials by dedicating years of service to both Reform and its successor parties, he had the good sense to call for a very well-worded "anti-poverty policy" in the Wildrose platform, a "moderate" policy to be sure that could even be called left wing but a far more defensible "moderation" of the platform than just watering down to platitudes the policies that happen to offend left wing insiders and their well-heeled special interests (yes, I am talking about unions). The truly poor are not an influential lobby in Alberta's legislature or really any legislature, and sadly Walter's anti-poverty plank did not come up for a vote.

Calgary Wildrosers still have a chance, however, to ensure that Walter Wakula is nominated as a Wildrose candidate in the next election. For anyone thinking that Walter isn't a true conservative because he has tangled with the "Conservative" establishment, I would suggest that that very fact may argue in favour of Walter being a true conservative:

ask Calgary West's veteran Reform, Canadian Alliance and Conservative activists and they will say they did not toil in the political wilderness all those years just to put another top-down organization in power. "They've lost their way," one frustrated long-time Reformer said. "This isn't the party we built."
- the National Post

Wildrose AGM review Part 2 - exec elections: hopes raised for operations, concerns raised for policy

On Saturday the AGM got underway with short speeches by the candidates for positions on the party executive. Barry Croucher announced that he was stepping down as a Northern Director, and although the 3 northern directors are not formally assigned to the province's northeast, northwest, and Edmonton, that's the de facto practice and Barry's departure paved the way for Chris Jones to become the director with primary responsibility for the party's development in the capital city. Chris brings a lot of energy to his new role and although I overheard one of the party's full-time employees with responsibility for operations express the opinion that Chris may be too controlling, someone inclined to take charge and advocate for Edmonton on the provincial executive is exactly what is needed in my view. Among the many lessons I've learned is that power vacuums do not remain unfilled for long when it comes to internal party politics, and if the director is not reasonably assertive, someone else, probably a candidate or supporters of a candidate hailing from a suburban constituency where the amount of common party resources diverted to his or her campaign could make the difference between victory and defeat, would take effective control. I am not at all concerned that Chris, who is a Strathcona resident, is going to be preoccupied with the needs of Wildrose in his constituency to the exclusion of the rest of the city. Although Chris has been an industrious servant of the party on the south side, going forward he should be a valuable aide to Wildrosers north of the river as well.

As I recall the only other position besides the regional directorships that was contested was that of VP Policy and I am not entirely sure what the ultimate verdict there is going to mean for the party going forward. I'm going to break from focusing on the AGM here and make the rest of this particular post an opinion piece on the party's policy process.

I've had my differences with John Hilton O'Brien over the past couple years, but I ultimately ended up voting for John HOB because John has been interested in complementing grassroots policy generation with "professional" input. My primary issue with John or, more precisely, the policy process in general was, in fact, that the moves in this direction did not go far enough.

John, whose distinguished history with the Wildrose Alliance and its predecessors goes back many years, was in any case defeated by a recent convert to the party from the PCs who unfortunately does not seem to envision a role for public policy professionals to inform and supplement member created policy.

I realize that Wildrosers reading this blog are going to be more than a little uneasy with my apparent readiness to raise doubts about our party's policy process going forward. Has this not been coming down the pipe for a while now such that it ultimately just suggests a character which doesn't value the concept of team loyalty high enough to be cut out for politics, perhaps? Can one reason with a blogger for whom dissent appears to be a point of pride? Doesn't my criticism just serve the interests of the other parties? This is, in fact, an excellent point and I fully acknowledge it. On this particular issue, however, which is getting more input from public policy experts, I am concerned that if there is no action taken it will not only up-end the basic reason I got involved in the first place (which implementing growth-friendly, fiscally conservative policy) but a reason many others got involved, which is ensuring that government takes its cue from the people as opposed to lobbyists, elites, and assorted insiders.

I was one of the few Canadians working on the taxation of income trusts between 2002 and 2006. The Department of Finance researched the issue carefully and advised both Ralph Goodale and Jim Flaherty that (unless all corporate taxation was eliminated) businesses that did not reorganize as trusts would become increasingly uncompetitive relative to their trust brethren unless the playing field was leveled and the Department could not discern a policy rationale for perserving the tax favourability extended to trusts. Interestingly, while I was working on the 20th floor as a civil servant, another current Wildroser was working with Flaherty's political advisors, whom we associated with the Minister's office on the 21st floor, and this group was urging the Minister to reject the Department's advice. I got into something of an argument with this person several months ago about the income trust decision and he eventually said that, whatever the merits of the move on policy grounds, the decision was badly made, not least because it was a decision that, never mind it not being made because of the grassroots, was made in spite of the grassroots.

On that much we could agree: the federal income trust move WAS undemocratic: the party made popular promises, of which not taxing trusts was one (albeit a minor, low profile assurance at most peripheral to the party platform), got into power and then was advised by an "elite" that a serious problem with the country's capital stock would emerge if the party, now as government, did not unwind a tax preference against the traditional form of business organization. Where the Goodale Liberals feared to tread, Flaherty moved boldly and went with the expert advice (the investment banking industry, which was making a fine living converting corporations into trusts, had expertise as well and opposed the move, but the finance industry's advice here was highly self-serving).

There is a lesson to be learned from the income trust decision, and that is that the Reform Party culture that prioritized grassroots policy formulation ironically exacerbated an anti-democratic, "elitist" policy move that occurred after the party formed government as the Conservative Party. I fear the Wildrose Alliance is going to end up in the same position, because if the policy process is entirely membership driven prior to forming government, after forming government the party is going to be in the difficult position of either dismissing the input that the ministries provide to the new ministers and the input of the various "expert"-staffed commissions and inquiries OR ending up in the situation Stelmach found himself when he refused to consider industry's input concerning royalties: a crisis of investor confidence and lost jobs. This scenario could be avoided if Wildrose considers the advice of the policy wonks now, despite the suspicions of the grassroots of these types.

Why am I talking about this in a post titled "Wildrose AGM review"? Because when I review Saturday policy session, it will be necessary for me to acknowledge the role that the caucus played in the debates and the possibility that the caucus was trying to bridge the gap between what the grassroots perceives the issues to be and what the reality is going to be for the party's elected members and ministers. As readers will soon discover, my position is that if the "reality" is that there are powerful lobbies and special interests lurking in the halls of the Legislature that can only be perceived from inside, the grassroots is entirely right to demand that the caucus simply find its backbone such that if tangling with these shadowy forces costs them their seats, at least they've gone down with integrity. But if the "reality" is rather that the grassroots-formulated policy is simply naive and/or incompletely informed, then the grassroots has to either trust its caucus / ministers who are in touch with the public policy specialists OR, far more preferably, demand a policy formulation process that gets the expert/informed opinion injected early so that the membership is not surprised with contrary decisions once the party forms government.

Some Wildrosers reading this may feel that I am creating a false alternative between broken promises and economic management by, as something of an elitist-sympathizer, inflating the danger of the latter. I would ask these readers to think about whether all the promises in the party's policy book to advance the interest of some group, be it taxpayers or the beneficiaries of government spending, are balanced by corresponding statements addressed to the group(s) on the other side that they can expect to do less well under a Wildrose government. This is the real issue here: even if a policy creates more winners than losers, there will inevitably be at least some losers and it is the identification of and advance communication with these losers that reduces the possibility that a Wildrose government would be perceived as undemocratically selling out to some elite or special interest. There is a great deal of rhetoric in the party's communications about fiscal conservatism, but when the concrete promises, especially on the tax cut front, inevitably don't add up to a budget surplus, something is going to have to give and the non-concrete, non-specific, purely rhetorical commitments to limiting spending are the most likely to become the hole in the dike. It is thus not an "elite" versus "grassroots" issue so much as a sum versus the parts issue: it requires taking up an elevated position that can see the whole lie of the land, not necessarily an "elite" position.

Wildrose AGM review Part 1 - setting the tone

The 2010 Wildrose Alliance Annual General Meeting kicked off in Red Deer last Friday evening with an impressive rally that in terms of size, scope, and sheer spectacle suggested a party that had to be taken very seriously as a political contender. An example of the differences from previous AGMs was that not only did many candidates for positions on the party executive distribute full colour professionally printed brochures instead of a paragraph or two of text written up on a word processor at home, but later in the evening they hosted well-stocked hospitality suites where attendees could schmooze.

The keynote address on Friday was, of course, delivered by the leader, and the Edmonton Journal's Capital Clicks blog provides a copy of the speech. Just reading the text, however, doesn't tell you how well the speech was delivered, and on that front Danielle Smith nailed the timing, tone, and body language. There were some word choices that I thought were rather too populist, like working "big corporations" into the speech in an disapproving context and mentioning "Stephen Harper" in an approving one, but Calgary Herald columnist Don Braid had it exactly right when he contrasted her speech with the one she delivered at last year's AGM, and described the Danielle of 2010 as "confident, self-possessed and very quick on her feet." A good politician has taken significant strides towards becoming a great one. Now it could be said that what the people really need is non-politicians, indeed, advocating for that will be the theme of this blogpost, but it is worth keeping in mind that if the people really wanted persons in office who are not good politicians, they have had many opportunities to vote for those meritorious people but, in their infinite wisdom, have generally declined to do so!

If I had a substantive general reservation about a speech that had me up on my feet with hundreds of others, cheering, clapping, and waving signs, it was that it was very tough on the governing party and while entirely appropriate for an opposition leader (I don't believe one should apply the "how statesmanlike was the tone?" question to speakers not currently in power) I wondered if the intensity of the political salvoes signaled a narrowing of the policy chasm. The belligerence exhibited by Preston Manning's Reform, for example, rarely approached the levels of hostility for the federal Liberals routinely exhibited by today's Harper Conservatives, and the economic policy of the current Tory government is scarcely more fiscally conservative than that of the Liberals, especially the Chretien/Martin Liberals circa 1996. The more that mountains of policy differences are reduced to mole hills, the greater the effort in terms of optics that is required to inflate them back up into mountains, perhaps.

On this particular point, which is to raise the issue of how much political partisanship is necessary or desirable, I would not take principle issue with Danielle, since she's just not an attack dog in terms of personality, or at least she wasn't. I'd rather take issue with long-time PC strategist and current acting Wildrose party president Hal Walker's apparent choking up as he introduced Guy Boutilier, who in turn introduced Danielle. Now I understand that when introducing a speaker, it is advisable to invite the audience to applaud the speaker, and never so much so as in the context of a political rally. But I couldn't help but wonder if Mr Boutilier would be seen as a hero to the point of getting emotional about it if he were still part of Team Stelmach. The suggestion of (excessive) partisanship is arguably the flattering interpretation, since the alternative interpretation is that the sentiment is affected. As followers of the blog would know, I had reservations about the floor crossings that occurred earlier this year, not because I am necessarily opposed to them in principle, but because person(s) whom I assumed were instrumental to the negotiations about what terms (if any) would be applied to the crossings were the same people who had been mightily indignant when Belinda Stronach crossed over from the federal Conservatives to the federal Liberals. The argument for taking a nuanced, practical view would be easier to support if that view won out over the view that leads to expressions of outrage rather less selectively.

I suspect that cynicism about politics is one of the biggest drivers of falling voting participation rates. How is that cynicism being countered when political group B denounces group A as a gang of cowards and sinners, and then honors some of those same group A people as heroes and saints after they've adopted the colours of group B? Now maybe there truly is ennobling, redemptive power in the Wildrose jersey, but in at least my own case when I bought a membership I still had all the many character faults that I had before!

Having said all that I should make it clear that this is not an entirely fair criticism given the context. Waving the flag too much at a rally? That's the whole point of a rally! Let me be clear that I consider Hal Walker to be an excellent party president. The night really was an overwhelming success, and I quite enjoyed both it and the hospitality suites, which included a stetson-clad David Gray refining the art of political entertainment (photo below). My purpose here with respect to the opinion element of my review is primarily to further advise readers ahead of my reviewing the Saturday policy sessions in my next post that your blogger has a background working on policy issues in a non-partisan federal Finance Department, where he settled upon the conclusion that political parties are ideally just a means for clarifying the level of democratic support for certain policy philosophies as opposed to a means for dividing ordinary citizens into warring, grasping camps.

Wildrose AGM begins Friday

I've returned to Alberta, having failed to blog for so long that the vast majority of bdell.ca readers have undoubtedly moved on to writers who don't disappear for months at a time... but if you have stumbled on this page and it is not yet June 25, be advised that if you are a Wildrose member, the party's Annual General Meeting will kick off shortly before 6 PM at the Capri Hotel in Red Deer on Friday. Give my mobile a call at (780) 497-2740 if you are Edmonton-based and interested in sharing a ride or accommodation.

In anticipation of the AGM, I'll make a few comments here about what we'll be voting on.

With respect to the policy resolutions and amendments, when I first saw them at the beginning of May, the proposal sponsors were identified and a "policy committee recommendation" was sometimes provided. This policy committee recommendation could potentially be very useful, but unfortunately is of limited utility this time around, primarily because there is little or no transparency with respect to who is serving on this committee, why they are on the committee, etc. Ideally, the membership would be fully informed on that count, and even then rather than just rely on an appeal to its own authority the committee would provide additional information that would help inform the membership, like identifying a specific statute that could conflict with a proposal, noting think tank studies or reports that are relevant, etc. One of the proposals that appeared several weeks ago (but appears unlikely to come to a vote this weekend) called on the party to support charging a user fee of $25 for emergency room visits in excess of six per year. The policy committee was simply "opposed" to this. From a policy perspective, I don't see what the problem is, and the committee doesn't help me see what the problem is when no explanation is provided for the recommendation. In fact, I would also oppose the proposal, but that's because whatever the merits of the proposal on policy grounds, it is terrible politics. Were I on the policy committee, I would advise expressing no opinion on the policy proposal despite the fact adopting it would hurt the party, simply because if we are serious about direct democracy, then we ought to leave to the membership matters which they can judge as readily and competently as any expert. The mandate of the policy gurus should be limited to weighing in on questions of policy, in other words. If there is an optics issue as opposed to an economic or legal issue, anyone's opinion is presumably as good as anyone else's.

So much for a general observation. What of the specific proposals? There are several which I would be inclined to vote against simply because they don't say anything substantive, and if we mean to avoid politics as usual, we would avoid statements on the order of "the party will be all things to all people." An example of this would be "the Wildrose Alliance supports making improvements to the Securities Act to increase transparency and to provide greater protection for issuers, intermediaries, and investors." Do I think that the party needs to spell out the exact improvements it has in mind? No, but a philosophy needs to be articulated. The interests of issuers and the interests of investors are fundamentally opposed such that it is the regulator's job to strike the appropriate balance. By calling for increased "transparency", the party seems to be taking the side of investors, such that the "Public Company Accounting Reform and Investor Protection Act of 2002", better known as Sarbanes-Oxley or SOX, would be the sort of thing the party would presumably support, since, after all, SOX mandated increased disclosure. But the statements that have been issued by the party suggest that the exact opposite conclusion should be drawn, since they have called for issuers to have the right to opt-out of regulatory regimes they don't like. The bottom line in my view is that the party should

1) remain silent on the issue and just let the caucus/leadership articulate the party's position (as is currently the case)
or
2) attack the proposed Canadian Securities Act specifically
or
3) support a national securities regular


Readers of this blog know where I stand on this particular issue. I believe a national regulator would be business-friendly in the same way free trade is business-friendly. If you poll businesses about free trade, obviously some domestic producers will be opposed because they will not want foreign competitors entering the domestic market. A refusal to accommodate those protected domestic producers would not mean taking an anti-business approach; it would rather mean that the tax and regulatory environment would be more competitive - giving the "losers" the right to "opt out" would be to dress up a reversal of economic liberalisation in the language of liberalisation. Ultimately, the ideological confusion arises from a focus on "freedom" when the focus should be on "competitiveness", but that's a matter for another post.


There is, in any case, a policy proposal that is substantive and, in my view, mistaken. It calls for the repeal of the plank

A Wildrose Government will restore education as an essential service under the Labour Code ensuring that no child’s right to an education is denied by school strikes or lockouts.

and replacing it with

A Wildrose Government will examine what services should be categorized as “essential services” and implement reforms that will ensure those employed in “essential services” are treated fairly

This particular proposal reportedly originated from "caucus", and all else equal I would normally defer to caucus because the caucus has more experience with respect to electibility issues than the rest of us. I thought Paul Hinman played a very useful role at the last AGM, for example, when he spoke out on environmental issues. Hinman had actually been elected, and knew that a dismissive view of environmental concerns would be a very difficult sell in a general election. I would fully acknowledge here that this particular plank is one of the very few that has been specifically attacked by the opposition. The Premier called it "draconian", if I recall correctly. But I have to ask since when is it draconian to say the party supports the interests of consumers, in particular when those consumers are children in need of an education? The proposal at hand here does not just say that the interests of "those employed" by the government will also be considered, by calling for the deletion of the reference to service consumers it suggests by implication that "those employed" are the only group whose interests will be considered.


The reality is that the denial of the right to strike is simply the denial of the right to exercise monopoly power over the supply of labour. We don't tolerate monopoly behaviour with respect to the supply of other inputs, but because "labour" has more sympathy than the interests of capital generally, the same economic phenomenon is often given a pass in most democracies. Economically, a monopoly over the supply of labour is just as inefficient. There is nothing stopping a teacher from resigning and going to work for someone else if he or she is not receiving a competitive package of wages and benefits. "Fair" is the word choice of leftists everywhere who do not support free markets, so it is less than comforting to see such phrasing spread into Wildrose policy documents.


Alberta has enough leftist political alternatives without Wildrose going down that path. If it were a matter of just being "moderate", that would be one thing. But if the party folds like Superman on laundry day as soon as a civil service union protests it seems to me the party has crossed over from "moderation" into being just a more populist version of the PCs. When I was a candidate for the party in 2008, a key plank was a reduction in the corporate income tax rate. Since that time, nothing at all has emerged from the party with respect to corporate taxation. In my view, the party needs to take a stand for fiscal prudence, and that means something substantive as opposed to rhetorical. Why is this issue so substantive? Because it goes to the heart of the fiscal crisis governments are facing. Heard about the gold plated pensions some California public servants collect and the connection to that state's fiscal woes? In fact, Illinois has overtaken California as the worst credit risk among American states. Is it just coincidence that "in 2008, Illinois had the country's lowest level of voluntary turnover in state employment, under 2% per year"?


A policy plank calling for limited spending is not going to amount to anything if the party cannot say "no" to anyone when actually in government. Denying a right to strike does not deny anyone a dime in competitively determined compensation, it is rather just a denial of the "right" to the profits of a cartel.

in Europe

I plan to travel from the Ukraine to Poland today, and to Finland middle of next week. Since I probably still will not be back to Alberta by mid-June, the blogging will still be limited. But I WOULD like to blog about the Wildrose Alliance policy proposals that will go before the late June AGM and have been released. I will try and take an afternoon to do that within the next week or two to do that...