Friday, December 17, 2010

The Best Men for the Job of B.C. Premier are Lawyers: Leonard Krog and Mike DeJong

Now that I have thrown poison darts at Adrian Dix and Christy Clark, let me say something more positive about someone.

As a lifelong observer of BC politics, a political scientist of a decade's standing, and as someone who was a public servant for 5 years,  I have reached the reluctant, somewhat boring and no doubt unpopular conclusion, that lawyers generally make better premiers than non-lawyers. They are simply more 'careful' about what they say and do, and in more than just a 'political optics' sense. Getting things done properly in today's world of government, is a highly legalistic exercise.Process is NOT for cheese, folks. It is the basis of nearly all good policy decisions, especially in this Charter era, and good lawyers are naturally good at it.

Furthermore, if efforts at electoral reform continue to fail,  and we cannot achieve moderation of government by tinkering with institutions, perhaps we can achieve it by changing the character of the leading decision-makers themselves. Tom Berger and David Vickers are not available, unfortunately, but a couple of pretty good lawyers are.

There are two leading candidates who have discharged the responsibilities of electede office after undertaking reasonably successful law practices. While they are not the only potential candidates who meet these two basic criteria, I think that they are the safest bets among the candidates on offer.

Leonard Krog has been an effective parliamentarian, particularly on the BC Rail file. He has done a little more than De Jong both in his law office and in his family life, which should hold him in good stead.

Mike De Jong has been one of the more solid cabinet ministers, holding down a number of sensitive posts with only  a whiff of scandal----he, like Falcon and Clark, was close enough to someone who was close to the BC Rail decisions, and will have some questions to answer.

So, if you want to make a prudent decision, choose someone who makes prudent decisions for a living. Choose one of these two guys.

Monday, December 06, 2010

First thoughts about the resignation of Carole James

I thought james lacked the gravitas to be a good premier, but I feel the same way about Jenny kwan. Farnworth, Krog, Simpson and Robertson all have warts but could do the job.

Good thing about Adrian Dix: He is their purest, most professional politician.

Bad thing about Adrian Dix: He is their purest, most professional politician.

Sunday, November 28, 2010

George Abbott is Good to be Lucky

Christy Clark's steady and deserved fall from being the Deputy Premier and Vaughn Palmer-anointed "future of the Liberal Party" in 2000-2001 has been followed by Carole Taylor's quasi-retirement and Colin Hanson's Icarus-like doom from flying too high and too close Gordon Campbell and the HST.  While Christy Clark remains popular within the party and has had a high public profile, she has been a repeated failure, whether as Education minister, one of the engineers of Stephane Dion's leadership, or as an impatient candidate for the Vancouver mayorlty. That just leaves five serious contenders: Kevin Falcon, Mike De Jong, Rich Coleman, Moira Stilwell, and George Abbott.

Moira Stilwell benefits from being both a woman and  being relatively unknown--a serious advantage in a party that has been in power for  nearly a decade and is in need of a facelift.   But much depends on the personal relationships between the remaining candidates. Would their mutual respect and insistence that success in cabinet portfolios cause them to pull for each other on the final ballot, or would mutual animosity cause them to pull behind someone else?  I think that if the personality clashes were that serious, they would have been obvious by now. That probably rules out Stilwell making it to the last round.  But, of the final four,  Kevin Falcon would seem to be the most compromised by his proximity to Gordon Campbell. His wings were not burned, like Hanson's, but they were badly singed.

So that just leaves Coleman, De Jong and Abbott.  Rich is the least telegenic of the three, and made a big splash when as Minister of Forests his brother became rich by having his land taken out of the Forest Land Reserve.  That just leaves De Jong and Abbott on the final ballot.

My hunch is that De Jong, who along with Farrell-Collins constituted the "fifth column" that replaced Gordon Wilson and David Mitchell with the Campbell crew way back in 1993, has the most favours to call.  But my sense is that  the avuncular Abbott, who has been quiet, competent, has more teflon and has probably tread upon fewer toes, will appeal to the Liberal Party's urge for politically expedient image renovation. Lucky, to be sure. But he also  worked hard to get into this position.

So that's my best guess, right now. Unless the 65-year-old Carole Taylor tosses down  her Chancellor's robes and makes a case for being the "caretaker" premier for the next 2-6 years, I'm putting my money on George Abbott.

Friday, November 26, 2010

Needed: An Insistence that the economy can be grown equitably and sustainably

"Canadians need to make some hard choices to tackle the key structural problems challenging the country’s future prosperity, including soaring health-care costs and a tax system that is unfair to lower-income earners"
---Ed Clark, President of Toronto-Dominion Bank
                    "A Rising Tide lifts all yachts, and leaves the rowboats behind."
                    ---Warren Buffett

If the President of theToronto-Dominion Bank thinks the tax system is unfair to low-income earners, then why should acquiesce in both federal and provincial policies that appear to assume that the only path to economic success is to shift the tax burden onto workers?  If  Warren Buffett appears on ABC's This Week complaining that the rich don't pay enough in taxes , and that the Bush tax cuts should be repealed,  and Bill Gates is arguing for a bigger and better investment in public education in the United States, and Ted Turner is complaining that the U.S. Supreme Court made a bad decision in allowing corporations to make unlimited donations to political campaigns, shouldn't we be listening?

As  Doug McArthur's Report on the BC Economy indicates, one of the distinguishing features of the Campbell government was its reliance on increased inequality as an attempt to gain competitive advantage.  As I have argued on this blog, one of the great disappointments of the Campbell record has to be the failure of this 'supply-side' thinking.  His top-heavy salary boosts for senior officials in government, his regressive approach to tax reform (including both the carbon tax and HST)  reveal this "golden goose" approach to economics, yielded very little in terms of investment and jobs. The reasons, I suspect, are at least two-fold: (1) He was mistaken, just a smany premiers before him were mistaken, to think that he could have that big an impact when employment, investment and jobs are so highly determined outside of BC's borders. (2) Even if a large general benefit could be achieved, it would merely generate pressure for surrounding jurisdictions to do likewise --in other words, a race to the bottom.

Of course there are individual communities and industries that would appear to be exceptions to these generalizations--the coastal fish farm industry would appear to be a clear example.  But even there, the benefits to the local economy have to be weighed against the larger social and environmental costs. The bent of the Campbell government was to refuse to undertake that social calculation.  But what is the purpose of government, if not to perform that function?

Monday, November 22, 2010

NDP Infighting

Curiously,  the group of caucus dissidents within the NDP Opposition in BC  actually consists of at least two very different groups--that is, one group of the usual suspects like Jenny Kwan and Harry Lali who don't like the moderate, modernizing and centrist tack that Carole James has been taking, who cater to the old line power bases in the party, and who would probably like Adrian Dix to take over as leader;  and several people like Leonard Krog and Bob Simpson, who presumably approve of James's general philosophy and direction but who nonetheless think that they (or someone else) could do a better job of  leading the party.

Interestingly, Dix is lying low, like a snake in the grass, letting others do the dirty work for him.

From what I can see, Bob Simpson was sacked simply for stating the obvious--that Carole James has not yet sold herself to British Columbians. On the other hand, the rift is ironic, because Bob represents a pragmatic economy-oriented wing of the party that James has been trying to appeal to.

James is reminiscent of Mike Harcourt in more ways than one. On the one hand, she has the right attitude of modern progressive economics (listening to business, stressing social investment and the environment) that is absolutely essential if the NDP wants to get and retain power; on the other hand she has an unconvincing hold on her party and an unconvincing leadership style. Paradoxically, she has the right general attitude about leadership style (finding a balance between the extremes of Harcourt and Clark, with a greater emphasis on the former than on the latter), but there are serious doubts about her ability to implement it.

It may be that Gregor Robertson is the answer, but for the time being the NDP should support its leader--after she lets Bob Simpson back into the caucus.  Perhaps Bob can  make it easier for her by admitting that, while there is absolutely nothing wrong with what he said, perhaps it was linen best washed in private.

If you have a comment about this or any of my other postings, contact me at .

Thursday, November 18, 2010

Advice for Mitt Romney in 2012: Choose Lisa Murkowski As Your Running Mate

The historic victory of Lisa Murkowski on a write-in ballot in the November 2010 as the new Senator for Alaska presents a stark contrast to the former governor of that State who shot to prominence in 2008.  First, Murkowski ran --and won--as a true outsider, i.e. having lost the nomination of the Republican Party. Second, unlike all those other rogue outsiders who got their feet in the door in 2010, Murlowski is a  centrist moderate.  Third, she is a sensible woman whom millions of middle-class women can readily identify with---at least as much as they can identify with publicity-seeking  Palin.

If the establishment of  the Republican Party is worried that the Tea Party is causing the GOP to  tack too far to the right, a Murkowski nomination might make eminent electoral sense as well, balancing the Romney ticket in terms of gender and geography as well as ideology and temperment. If ever a vice-presidential running mate was tailor-made to attract  the independent voter, Ms Murkowski is it.

Saturday, November 13, 2010

Some obvious, but neglected, thoughts about Canada's Afghanistan Mission

Three facts about Canada's role in Afghanistan are too often neglected or obscured in political debates.

First, Canada was obligated by virtue of its membership in NATO to participate. An ally was attacked from bases in Afghanistan.

Second, after the greatest military superpower the world has ever seen was attacked on its own soil for the first time in 60 years, the country that was picked to play a lead military role in arguably the most dangerous province in Afghanistan,Kandahar, was.....Canada.(??!!!). Some people will try to argue otherwise, but this state of affairs only makes sense when you consider that the United States had 150,000 troops tied up in a dangerous mission in Iraq.  But if Canada rejected direct participation in the Iraq war on the grounds that it was unnecessary, illegal and   immoral, why on Earth should we feel an obligation to pay a disproportionate sacrifice in Afghanistan, when the reason for that sacrifice was (in large part) Iraq?  Since both Stephen Harper and Michael Ignatieff supported the war in Iraq, it must have been easy for them to indirectly support that war  by taking on more of the burden in Afghanistan.

Third,  the parliamentary resolution passed in March 2008 says that "Canada will end its presence in Kandahar as of July 2011."   In other words,  there is no room to argue that  Canada's military "trainers" should remain in that region on the grounds that they are already familiar with it.  They should set up shop in places well away from Kandahar or Waziristan, such as Kabul, where most of our NATO partners have been safely ensconced for the past several years.  There will still be casualties after July 2011, but if Canada's mission is properly conceived and executed, Canadian military funerals should be a much rarer occurrence a year from now.

Saturday, November 06, 2010

So What Was Wrong With Gordon Campbell?

One should never presume to be able to read another person's mind, but it has always seemed to me that Gordon Campbell was badly burned in the 1996 election. He lost that contest to Glen Clark in no small part because of his own folly and naivete:  what he did was speak openly, before the election, of his intention to privatize B.C. Rail. Ass a consequence, any interior towns along the BC Rail route that couldn't stomach the thought of a NDP MLA voted for the Reform Party, led by Jack Weisgerber, splitting the "free enterprise" vote. Some ill-advised candour on Campbell's part about possible restraint in social spending further contributed to the Liberals' demise. While certainly Glen Clark's ability to capitalize on his opponent's maladroitness was an important factor in the NDP's re-election, it is more true to say that the Liberals lost the election than it is to say that the NDP won it--and that it was principally Gordon Campbell's fault that the Liberals lost.

Campbell certainly learned his lesson, and never made the mistake of excessive election candour again. But he did make the opposite mistake, several times, even though he probably interpreted his election victories in 2001 and 2005 as vindication for his hard-won political acumen. In fact, those elections were won for reasons other than legerdemain: anyone could have led the Liberals to victory in 2001, and Liberals were rescued by an Asian-fuelled surge in commodity prices in 2004-2005.

So the long fuse of the BC Rail scandal and the short fuse of the HST backlash were lit with the new strategy of cautious public opinion "management" that was a central characteristic of the Campbell years. Despite some impressive legislative achievements to his credit, he never learned to trust the people, and that fact ensured that they were unlikely to fully trust him, either.

Campbell's faith was reserved for B.C. capitalism---which is why we can charitably interpret his prediction in 2001 that "tax cuts would pay for themselves" and his clinging to a belief in only a half-billion dollar deficit in 2009 as wishful thinking on his part, rather than merely crass dishonesty. He did everything he could, within reasonable political parameters, to create a good business climate. He hoped that business would return the favour. As part of this effort, Campbell's tax policies--in particular the carbon tax and HST in exchange for cuts in progressive income taxes--- appeared to shift more of the burden onto ordinary people. These are the same ordinary people who Campbell couldn't trust with a discussion of tax policy prior to the 2009 election, the same ordinary people whom he had ("mistakenly") trusted in 1996. If, deep down, Campbell wanted these people to like him, he had a flawed strategy for achieving popularity.

But was it wrong to avoid the issue before the election and then implement the tax in the first year after the election (in order for the anger over the fait accompli to die down before 2013)?  Is that not the common political strategy  for administering painful-but-beneficial medicine upon recalcitrant publics? My advice to political leaders in this situation was (and is) twofold. First, equity matters. If the point of the HST was primarily to achieve administrative and economic efficiencies rather than to engineer a supply-side "trickle down" economy, then design and explain the tax in such a way as to make that fact perfectly clear. France and Sweden have more equitable societies despite getting close to half of their revenue from consumption taxes; that fact suggests the possibility of a more equitable HST. Indeed, much of the opposition to the carbon tax was blunted by a similar strategy of ensuring that two-thirds of BC families would be no worse off as a result of the tax.

Second, the question of tax harmonization could have been folded into the terms of reference of a commission on taxation that would have included extensive consultations similar to the dialogue on health care that the BC government held earlier. The Commission could have reported to the legislature in 2011. Whether you could call it deliberative democracy or simply management of public expectations, it would have provided an opportunity for citizens to let off steam in an environment much more controlled and less volatile than a grass-roots populist revolt led by Bill Vander Zalm.

But hindsight, as they say, is 20/20.

Thursday, September 23, 2010

The Real Lesson of the Gun Registry Debate

The Conservative PMO is cynically planting the seeds of division across the country, in the hope of winning a majority government using the economy and law-and-order as the twin themes. But if we had a different electoral system--one which more closely matched the proportion of seats with the proportion of the vote, they would have to adopt a different strategy. Then, they would have to appeal to a wider cross-section of the public.

If the Liberals win the next election, the same problem will likely emerge in a different form. A Liberal-NDP cohabitation sounds stable, but if it is too popular (e.g. gets 40% or more approval in the polls), the Liberals will be tempted to engineer their own defeat so that they can springboard into a majority government.  That is what Trudeau did federally in 1974 and Peterson did in Ontario in 1987.

The solution: move to a slightly more proportional electoral system that makes it more difficult to win majorities and that rewards politicians for seeking support across the country instead of rewarding them for doing the opposite.

That, for me, is the real lesson of the gun registry debate.

Monday, September 20, 2010

So What's Wrong With Gerry Schwartz?

{A slightly abridged version of the following piece has appeared in The Mark News  as part of a series of op-eds attempting to answer the question: "Who is Canada's Most Influential Person?" I nominated Mr. Schwartz, who has been dubbed "Canada's Ultimate Capitalist"  for his success in the field of mergers and acquisitions,  an area of business activity that needs sober re-assessment in light of the current Great Recession.  It is perhaps also significant that a couple of weeks after I wrote this piece, it was announced that Nigel Wright, Schwartz's right hand man at Onex, was going to work for prime minister Stephen Harper as his Chief of Staff in the PMO.  This was further evidence of Schwartz's close connections, and deep influence, within both of Canada's major political parties.}

From the perspective of the financial crisis and deep recession of 2008-2010, one has to look back on the great wave of mergers and acquisitions that gathered steam in the 1980s and 1990s with a degree of ambivalence. Back then,  it became respectable for the first time to borrow 90% of the purchase price of an acquisition as a regular business practice.  But now....let's just say that the entire U.S. economy is in a process of "de-leveraging", and that we are all feeling the pain.

 Jerome Kohlberg, Henry Kravis and George Roberts—all American giants of corporate finance— and Canada's Gerry Schwartz cut their  financial teeth at the Wall Street investment bank Bear Stearns (yes, that Bear Stearns) in the early 1970s. Their great innovation—obtaining highly leveraged loans (and using junk bonds whenever necessary) to buy (often under-valued or poorly managed) businesses—has provided an additional discipline on the market and has been good for many stockholders. On the other hand, it is not difficult to see how the seeds of the 2008 Financial crisis (which saw under-capitalized mortgages spilling into the leverage-financed and high –yield debt markets) were sown in the age of the mega buy-outs that preceded it.  And while Mr. Schwartz was not particularly responsible for packaging or re-packaging sub-prime mortgage debt, there is a certain guilt by association.

Gerald W. (“Gerry”) Schwartz ranks about 30th on lists of Canada’s wealthiest people, with an estimated net worth of over $1.5 billion. He founded the private equity (buyout) firm Onex Corporation, which now has revenues of $26 billion and over 220,000 employees worldwide, making it one of Canada’s top ten companies. Yet even these statistics may understate Mr. Schwartz’s influence. From his early role as co-founder, along with his mentor Izzy Asper, of CanWest Global in 1977, to his founding of Onex in 1983 and his emergence in the 1980s as Canada’s Leveraged Buy-Out King, to his audacious bid to take over and merge Canada’s two national airlines in 1999, to his recent investments in the U.S. housing and auto industries (not to mention his business and philanthropic ventures with his wife, Chapters/Indigo CEO Heather Reisman), Schwartz has represented the new face of Canadian capitalism.

Onex is publicly traded, which is unusual in the buy-out world. And whereas most private equity or investment management firms “flip” companies for a quick profit, Schwartz prefers to grow firms over a number of years and help them to expand their market share. On more than one occasion, investors have complained about Schwartz having his cake and eating it too—as in 1987-88 when Schwartz raised $246 million by going public, but still skimmed a private-firm-like 20 per cent of the profits as a fee. But what shareholders have not generally complained about is the rate of return on their investments, or Schwartz’s sterling reputation as a long-term, patient investor.

Largely as a result of Reisman’s influence, Schwartz became more involved in Liberal Party politics in the early 1980s. He became a major fundraiser for Liberal leaders John Turner and Ontario's David Peterson, and became friends with finance minister and prime minister Paul Martin. Schwartz also grew personally close to prominent Conservatives, such as then prime minister Brian Mulroney, Toronto financier Hal Jackman, former federal finance minister Michael Wilson. Today, when Stephen Harper, Michael Ignatieff, and Bob Rae fall over each other to court Jewish voters, they will all have to beat a path to Gerry and Heather’s door. “Gerry has been involved with just about everybody in power," a top Liberal strategist has been quoted as saying. "But you also have to realize that this stems in part from a strong sense of public service. And that it's real, not fake."

Real, to be sure, but one need not be either a Marxist or an anti-Semite to see that Schwartz’s own ethnicity is as much at play as is altruism in his political and philanthropic activities. The Israeli military does not rank high on most people’s lists of needy charities, but Schwartz has created a $3-million scholarship for 6,000 non-Israeli born Jews serving in the Israeli Defense Forces. In 2004 Schwartz also founded the Canadian Council for Israel and Jewish Advocacy, an umbrella group that has been criticized as an attempt to “corporatize” the funding of Jewish community organizations and tie them to pro-Israel advocacy.

His advice for young entrepreneurs sounds almost hokey, but also rings true: “Get an education. Have, maintain, and don’t give up on the principle of integrity. And stick to it. Nixon put it well: it is not over when you fail, it is over when you quit.” For better or for worse, Mr. Schwartz has followed his principles.

Saturday, August 21, 2010

A Nice Summary of the Current Crisis

 There is a tendency on the part of intelligent pundits to give up on talking about "capitalism"  because of its sheer dominance and pervasiveness.  That has has been my own tendency in recent years, as I have drifted toward looking at smaller and more manageable problems.  Nevertheless, it is worth stepping back and looking at the big picture.  One aspect of that  picture is that, while it was plausible to attribute the stagflation of the 1970s in part to the strength of trade unions, that critique has been implausible since the 1980s, when blue collar trade unionism began to decline in relative size and strength and labour -intensive manufactures began shifting to the third world.

David Harvey, the author of The Condition of Postmodernity and over 20 other books, has provided a nice 11 minute  overview  the current crisis in a witty  and accessible video:

Wednesday, August 04, 2010

Initial Reaction to the CMA Report: A Welcome Step in the Right Direction

The CMA Report released yesterday, "Health Care Transformation in Canada" , is receiving some mixed reviews of the eyeball-rolling "not another report" variety; for example, Norman Spector accuses the CMA of "speaking with a forked tongue" --i.e. advocating more comprehensive coverage and a single payer system while at the same time approving of Quebec's movement toward deductibles and medicare premiums. While recognizing Spector's point, I have a slightly more positive reaction. I have been waiting for an analysis that cuts across the three silos of Romanow, Kirby and Mazankowski, i.e. recognizing the gravity of the cost situation without exaggerating it; confronting the problem of health costs crowding out other policy priorities; distinguishing between public financing and public delivery, without fetishizing that distinction; and taking into account the best comparative work, such as the that of  Ted Marmor and the Devereaux Study.

"Forked" or not, the CMA is speaking more sense than it has in years. Unlike Brian Day and other likeminded political leaders in this professional association, the current report does not leap to the conclusion that we should open the doors not only to private for-profit delivery but private financing as well. (For example, France is a notoriously centralized unitary state in which 60 million people are squeezed into an area slightly larger than Saskatchewan, yet some people want to leap to the conclusion that its success stems from its fees at point of service, or "depassements". What little truth there may be to that judgement is itself grounded in that particular European context.)

Instead, the CMA recognizes that many of the biggest cost-drivers emanate from the 30% of the system that is still privately financed. Extending the scope of our relatively efficient single payer system to include more drug and home care is perfectly sensible--just as is the greater empowerment of physicians and patients to tailor health care to individuals' needs. Combining these two directions is a difficult balancing act, but not a full-blown contradiction. Ideally, we would each pay a medical premium that would carefully distinguish between the behaviours that we have some control over and the conditions that we do not control; incentivizing the former while co-insuring the latter all the while taking into account ability to pay. Such a perfect system does not as yet exist, and would be vulnerable to corruption by economic interests. But overall I would say that the CMA has taken a step in the right direction.
I will have more to say when I have reflected on each of the CMA's five recommendations in the light of the above-mentioned literature.

Saturday, June 19, 2010

Bob Rae versus Libby Davies on Israel

Bob Rae has called upon Jack Layton to fire Libby Davies.  Indeed, it  seems that the NDP House Leader has crossed the line that separates personal opinion from party policy, since her criticism of Israels' long occupation "since 1948" appears to call into question the legitimacy of Israel's existence; and her call for a renewed intifada--what Rae decries as "calling for more violence, more suicide bombing, more death, more destruction" -- needs some explanation. But if there had been no Palestinian resistance, wouldn't elements in Israel and in the international community regard that as tacit acceptance of Israel's authority? What would the long-term implications of that be for the establishment of a viable, independent Palestine? There are some important issues of international history and law that need to be spelled out.

Bob should know that while it is wrong to compare Israel's occupation of the West Bank to the Nazi's treatment of the Jews, there is some plausible analogy between the desire for a Greater Israel and the way the Nazis treated Poles and other occupants of ancient Germania.(Hence "Lebensraum").

In other words, there was more to Nazism than just antisemitism. And while Israel's right to exist should be accepted, I can't help but think that that small clutch of victorious allies who called themselves the "United Nations" in 1947-48, and who acted out of guilt about not liberating the death camps sooner, and sympathy for fellow educated Europeans, should have done a better job of considering everyone's interests in Palestine--especially those of the Palestinians. In other words, it was not unreasonable for Arabs and Palestinians to consider the creation of Israel as a legacy of colonialism, and not as a straightforward instance of de-colonization. And their slowness to come to terms with Israel's existence should not be taken as an excuse for building settlements all over the West bank, or for annexing East Jerusalem.
It is also important to clarify what one means by "intifada". The first or "popular" intifada was an inspired and inspirational grass roots movement that took place in the occupied territories and was aimed at Israeli soldiers and settlers. It was also the only Palestinian resistance that actually worked, by strengthening the hands of moderates inside Israel (led by Yitzakh Rabin) and deservedly garnering support throughout the world. Then Rabin was assassinated (by a Jew who wanted a Greater Israel), Ariel Sharon made his provocative march around a Muslim shrine, and all hell broke loose. Unfortunately, the Palestinians' self-proclaimed leaders (esp. Hamas) took control of the protest, and the polarization between extremists on both sides took place. The Second Intifada is an entirely different beast. Before deciding to fire Libby Davies, my question to her would be: which intifada were you referring to?
What should Canada's role be in the Middle East? To support the Rabins, the Abbas's and the Jimmy Carters of this world. Israel has a right to its 1967 boundaries--one could fudge that a little by saying that it has a right to that amount of land it had in 1967. If Israel gives Palestine enough land to build a corridor between Palestine and Gaza, Palestine could in principle agree to give Israel enough land to allow it to keep about half of its existing West Bank settlements. That is the kind of specific two-state solution that makes sense. I think that Libby Davies can be brought around to that, and should say so. The only question is: can Stephen Harper and Bob Rae be brought around to that position, or are they too busy competing for the support of the Jewish community?

Saturday, May 29, 2010

Everything I always wanted to know about SEX

According to a recently released study, Canada's teen birth rate has decreased 38 percent, while the teen abortion rate declined 35.7% The reasons? Teenage women are not more or less likely to have sex than they were 10 or 15 years ago. According to Alexander McKay, research coordinator at the Sex Information and Education Council of Canada, the reasons for the decline are (1) better access to contraception, (2) higher quality sex education (including the internet and planned parenthood clinics) and (3) "Canada's relaxed attitude toward toward adolescent sexual health  allows teens to be better educated on the subject."

Pro-Life activists should be happy. But I wonder if they really are.

Thursday, May 13, 2010

I Have a strange Confession

It occurs to me that I may have been the first politician in the history of the B.C. Legislature to have advocated a Harmonized Sales Tax. Way back in 1980, I was in the Universities Model Parliament, and decided I would stump the government ministers by recommending the Value Added Tax. This naturally had them scrambling, since none of them had ever heard of the V.A.T., even though it was already commonly used in Europe.

Should I be ashamed?  Efficiency pays. Harmonization streamlines the administration of the tax, and  is more efficient than a straight sales tax, as it allows businesses to get credit for the tax they pay on inputs (as a deduction off the tax they collect). Exporters can reduce their prices by the amount of the tax they pay in imports that previously would have to be covered in the price. I would probably prefer a  broader tax (i.e. with fewer exemptions) at a lower rate and more targetted help for low-income consumers. But, in principle,
I am not opposed to the HST.

Consider this startling passage from the Mintz Report.  It suggests that 82% of the increase in capital stock  and 80% of the job creation resulting from proposed changes to BC's tax regime will result from sales tax harmonization--i.e. only 18% and 20% from corporate tax cuts.  Thus, if one is really concerned about the equity of shifting tax burdens onto ordinary consumers, I suggest ditching the corporate tax cuts, not the sales tax harmonization.

By 2018, when federal and B.C. corporate tax reductions and sales tax harmonization will be
fully implemented, British Columbia will have a tax regime that is more attractive to capital
than that of either Alberta or Ontario. While corporate tax reductions will have been helpful in
achieving this aim, the largest aid to British Columbia’s tax competitiveness will have been sales tax harmonization (emphasis added). With the elimination of the existing retail sales tax on capital inputs, British Columbia’s effective tax rate on new capital investments will decline by 9.1 percentage points, which will represent almost 60% of the drop in the cost of capital for businesses in British Columbia over the next four years.
By 2020, the combined effect of the corporate tax cuts and sales tax harmonization will be to
increase the capital stock by more than $14 billion, which is expected to translate into an
increase of 141,000 jobs. Sales tax harmonization alone will be responsible for an $11.5 billion
increase in the capital stock and an increase of 113,000 jobs by the end of the coming decade.

Monday, May 03, 2010

Campbell's Supply-Side Follies--and a Face-Saving Proposal

If there has been one serious flaw in the record of the Campbell government, it is that it will not give up on supply-side economics. From its very first move–the 2001 20% tax cut that was supposed to pay for itself, but which wound up creating the largest deficit in history–to the carbon tax (which benefits the affluent Vancouverite rather more than other groups)to the HST tax shift, they have refused to heed either public opinion or the economic evidence. They have been loyal to their core constituency, however: the business and professional elite fo Greater Vancouver, who by and large feel that their private gains have outweighed the public’s losses.

Now that the NDP is pulling ahead in the polls, and even former Finance minister Carole Taylor has had the good sense to distance herself from these large tax increases on ordinary consumers, it is time for the Campbell Liberals to consider how they might soften the regressive nature of their policies, while still hanging on to the conceptual virtues of both the HST and the carbon tax. I have two specific suggestions:

1. Lower the HST 1%-2%---with the lost revenue made up by corporate and personal income taxes.

2. Adopt the Canadian Centre for Policy Alternatives proposal to modify the incidence of the Carbon tax, viz. the low-income credit, at minimum, should be increased in line with carbon tax revenues, and ideally its share should be increased to half of revenues. The remaining half of carbon tax revenues should provide funds for other climate actions.

Even if the loss of revenue from reducing the HST (and the corresponding hike in income taxes) is too great to permit the adoption this prescription, one could always narrow some exemptions in order to lower the overall rate or broaden some other exemptions at the current rate, or target subsidies to the poor, etc.  My general point is, I think still valid: that there a number of ways of dealing with the equity issues raised by the HST and the Carbon tax, short of  abolishing these taxes altogether.

Wednesday, April 28, 2010

A Point of Clarification about the Olympic bursary

When I suggested that there should be a $200 million BC Olympic bursary, I wasn't just suggesting (in the middle of a deep recession) that an additional $200 million in taxes be raised for my favourite spending priority. This was also an argument about spending existing funding more effectively. The number of $200 million corresponds to my rough calculation about what it would take to bring the BC's average student debt load down to the national average. The kind of support--tied demand-side subsidies to students--was based on my analysis of the relative strengths and weaknesses of vouchers, grants to universities and tuition freezes as alternative policy instruments.

What if $50 million could be found in other existing government outlays, including existing universities funding? And if another $50 million could be found from the federal government? That would only leave $100 million of additional spending to found out of rising resource revenues and plugged tax loopholes. If $200 million will close the access gap for the 100,000 neediest full-time studentsover four years, then a mere $25 million will close half the gap for a single year.

Any takers?

Sunday, April 18, 2010

Site C is the Big Test for Environmental Assessment Office

Way back on November 30, 2006 , I worried that the three coal-fired power plants being planned by the government would be subjected to one of the weakest environmental assessment procedures in the country. Fortunately, those coal-powered plants were cancelled en route to a newer and greener image for Gordon Campbell. But now that the Site C Dam project is being resurrected, we must again ask: is this EA process up to the job?

BC’s Environmental Assessment Act was rewritten in 2002, replacing one of the country’s most progressive provincial EA laws with one of the weakest laws. Strong provisions that were eliminated included a purpose section emphasizing sustainability, requirements to examine cumulative effects, the need to detail alternatives, and innovative public participation requirements, including a mandatory role for First Nations. All of these functions are now being performed more ‘flexibly’ and ‘efficiently’ by a more ‘streamlined’ Environmental Assessment Office.

Perhaps the high profile of this project will help to ensure that the SiteC assessment will be conducted properly. But it will require vigilance and strong public pressure every step of the way.

Sunday, March 28, 2010

NDP Should Play a Leading Role in Debating Healthcare Reform

When the Liberal Party of Canada recently held a "thinkfest", I wasn't exactly blown away by the experts. Dont get me wrong; philosopher Daniel Weinstock, former Bank of Canada governor David Dodge, former University of British Columbia president Martha Piper and former foreign affairs minister Lloyd Axworthy are all very bright people and important leading citizens of our country. It's just that the big topic of conversation turned out to be the cost of health care, and none of these people is really an expert on health care.

The NDP spends so much of its time and energy fighting defensive rearguard battles that it could do itself a lot of good--and a bit of good for its image--if it held its own thinkfest directly confronting the question of what to do about a health care system in which costs will be rising twice as fast as the rest of the economy for the next couple of decades. It could assemble a more expert and more diverse group of speakers than the Liberals just did: How about Roy Romanow debating Janice MacKinnon on the sustainability of single payer health care? Dr. Bob Evans of UBC and health futurist Jeffrey Bauer on the potential of 'reform from within' public health care? Yale political Scientist Theodore Marmor on comparative perspectives and Dr. Marcia Angell of Harvard on healthcare reform from the perspective of the medical profession in the United States?

David Dodge? Lloyd Axworthy? Give me a break!!

Wednesday, March 17, 2010

My BC-STV Post-Mortem: Half a Loaf Would have been better than No Loaf--and it would have been better than a Whole Loaf, too.

It is important for both proponents and opponents of BC-STV to recognize that the near-win in 2005 and the decisive loss in 2009 were influenced by party politics and the (un)popularity of governments. BC-STV supporters in 2005 got a bump because there was still a lot of lingering distaste for the Liberals; in 2009 they got a thump as Liberal supporters came to appreciate how the existing electoral system seemed to give their party a firmer grasp on power.

I have finally taken a look at Fred Cutler's data and the debate about it at The Tyee: and it is difficult to argue with a statistic as stark as this: Over 60% of Green and NDP voters supporting STV in both elections, while only 20% of Liberals supporting it in 2009 (down 30% from 2005!).

To be sure, however, the more recent result was also due to the fading of memories about absurd election results in 2001; to the ease with which opponents of BC-STV could make fun of the vote-counting method; and to the size of ballots and constituencies.

I have long felt that the Citizens'Assembly should have been more cognizant of the constraints placed upon it by the Legislature (largely at the behest of the BC Liberal caucus)--namely, the 60% threshold and the 79 seat limit. Specifically, both of those factors indicated that reaching for anything close to pure proportionality would be a mistake. The perfect is often the enemy of the good, and in this case huge interior ridings and long urban ballots proved to be a turn-off for many people who were otherwise interested in electoral reform (remember, Cutler's finding was that, in general, interest in electoral reform went slightly up between 2005 and 2009.)

I think David Schreck may have been right when he said "They (the Citizens Assembly and electoral reformers) lost the opportunity of a lifetime in 2005 by recommending BC-STV rather than some more acceptable form of proportional representation." But 'more acceptable' need only have been a more moderate form of STV--what I have called "STV lite".

Had I been on the Assembly, I likely woud have tried to persuade my colleagues to keep single member constituencies in 10 or 11 of the largest northern ridings, albeit with a preferential ballot--in other words, AV for the North; 3-member constituencies in the large urban and suburban areas; and dual ridings up island and in the interior. (my preferred distribution under 79 seats in 2005 would have been: 10x1 seats for the North; 12X2 seats for the interior and small cities; and 15 X 3-member constituencies in Greater Vancouver and Greater Victoria). This would have significantly improved proportionality, but it would still not have been proportional representation--It could be called either 'semi-proportional' or 'semi-majoritarian'. And it would have had several significant advantages:

  • It would have made Green Party and other third party votes count, without too much risk of giving people who are "green" (in more ways than one) the balance of power in the Legislature. For example, in my home riding of the Cariboo there would have been fierce competition for the second preferences of Green voters---and every reason for Green voters to get out on election day. It would have been the same story in many BC ridings.

  • It would have shaken up the safe ridings, like those of Linda Reid, Adrian Dix, Jenny Kwan, and Colin Hansen, transforming them into competitive multi-party contests.
  • It would have given voters constituencies that correspond more closely to their common sense notions of their regional communites, rather than to artificial political boundaries--districts like "Cariboo", "Richmond", "Kootenay".
  • It would have been a brave political party that ran a slate of three candidates of all the same colour and gender. To do so would have invited a hemorraghing of second and third preferences. As a result, there would have been a more representative legislature.
  • It would have expanded voter choice without the unpalatable consequence of geographically huge ridings or unfathomably long ballots--or the unsavoury aspect of MMP, which is a party list in which candidates are competing for favour of party members, not the preferences of the citizenry as whole.
Having such a semi-proportional option might still not have satisfied partisan Liberals who had come to love First Past the Post, for obvious reasons; or those who had strenuously objected to STV or preferential voting in any form. But it would have removed the two most objectionable features of BC-STV, namely the huge ridings in the interior and the long ballots in the cities.

And that might just have sold, in 2005 if not in 2009.

Sunday, February 07, 2010

B.C. Policy Perspectives: A Quote Worth Heeding

B.C. Policy Perspectives: A Quote Worth Heeding

A Quote Worth Heeding

" The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean great and most universal cause of the corruption of our moral sentiments." ---Adam Smith

Sunday, January 17, 2010

New Green Energy Task Force= Another "New Relationship"?

Gordon Campbell's Native Economic Development Advisory Board and First Nations Leadership Council were effective means of bringing First Nations Leaders within Liberal-led governance structures--and an effective way of defusing them as a possible source of Opposition. Now the same thing is happening with leading members of the Environmental Movement: In December Tzeporah Berman was handing Gordon Campbell an Award in Copenhagen; in January Campbell is naming Berman to his prestigious new Green Energy Task Force.

And is that such a bad thing? Co-optation is bad if it prevents something better from happening. Unless the NDP and the Greens come up with something better to produce a green energy policy and a green infrastructure, then it I am not going to complain too loudly.
Furthermore, I have already argued in my chapter in the recent B.C. Politics textbook, British Columbia Politics and Government (2009), the incorporation of interest groups and NGOs into institutionalized webs of governance is a well-established trend; premier Campbell is merely hastening that process and steering it to his political advantage. The NDP should endeavour to do likewise.
I have three suggestions for the new Green Energy Task Force:

(1) Turning revenue from carbon tax into supporting green infrastructure projects, instead of simply reducing progressive income taxes;

(2) Increasing spending on support for agriculture and agricultural production, an area where BC has lagged behind all other provinces;

(3) Shifting emphasis from promoting fish farms and private hydro to promoting wind, geothermal and bio mass on public lands and private lands zoned for agriculture--esp. since wind farms and many biomass projects are consistent with agricultural land use.

Saturday, January 16, 2010

Canada's next Governor-General should be a a First Nations Leader

Her Majesty Queen Elizabeth II is a hereditary chief. Why shouldn't her representative in Canada be one as well?

I haven't had the time to write a proper OP-Ed , or even a letter to the editor on this subject, but since nobody on CBC's At Issue panel will say it, I will: the next Governor-General should be a First Nations person. Alberta's Willy Littlechild would be a good choice, so would B.C.'s Wendy Grant-John. Numerous Cree and Metis leaders can speak passable French.

It is long overdue.

What Caused America's $1.4 trillion deficit and $12.3 trillion debt?

#1 Google or bing "Cost of Bush Tax Cuts" for 2001 through the end of 2010, and you'll find the figure of $1.9 trillion dollars.

#2 Google or bing "Cost of the Iraq War" and you'll find an expected total direct cost to U.S. taxpayers of $1 trillion dollars and a total cost to the economy of $3 trillion dollars.

#3 Then there was the loss of revenue associated with the financial crisis---which cost close to $5 trillion dollars for various bail-outs to avert collapse and a further $ 1trillion dollars for the economic stimulus package necessitated by the recession.

#4 But don't forget that the real villain is all those liberal "entitlement" programs, like President Obama's health care reforms, whch could, according to the Congressional Budget Office, offer a decrease in the deficit of $132 billion over the first decade, and a decrease of $1 trillion or more in the decade 2020-2029. Blame President Obama for that.

Monday, January 04, 2010

Can the Left Be Trusted to Reinvent Government?

This question occurred to me while I was reading a recent newspaper article concerning the federal government's plan to reduce debt by eliminating public service positions when baby-boom civil servants retire. How should a more 'progressive' government approach the same set of issues?

(1) From sunset to sunrise policy areas. One clue comes from the private sector, where the adage from industrial policy is 'protect workers, not jobs'. There is nothing sacred about a position, even when it is one's own. What is sacred is the idea of a public service career that directs resources and bureaucratic talent to where they are most needed. If we are going to expand single-payer medicine and the funding for it into home care and pharmacare, for example, it should not be necessary to raise taxes in order to do so---if the resources can be found inside government.

(2) Vouchers Where Appropriate (i.e. not schools). I have written elsewhere that the voucher concept works well in areas where there are (1) a small number of simple, discrete policy goals; (2) the relevant clients are individuals rather than institutions or complex policy communities; and (3) the relationship between policy means and ends is clear and direct--labour re-training and post-secondary tuition are the two examples I used.

(3) Putting the 'Public' Back in Public Administration , i.e. through Greater Public Sector Accountability. There are examples where corporate modes of governance have failed miserably, particularly in the health care sector---regional health boards in BC and Ontario consisting of members from the corporate sector approving the allocation of swine flu vaccine to private clinics, fo example, or nine executives in an outfit like Infoway paying themselves $3.9 million last year because of their supposed expertise in coordinating healthcare data; or the CEO at E Health Ontario receiving a bonus of $114,000 after only four months on the job. I have heard through the grapevine that similar sums of money are being earned in Alberta by new CEOs simply for making across the board cuts of a given percentage. The bottom line is short-term budgets, not quality or even the intelligent management of long-term costs.

The reasons for this state of affairs are at least twofold: (1) Witless neo-liberal obeisance to the corporate sector; and (2) gutless fear that handling these issues in -house, using line ministries directly accountable to the Minister, will result in --gulp--direct political responsibility for any mistakes that are made. In the words of the former Deputy minister of Health in BC, Lawrie McFarlane, "It is time that we rebuilt healthcare delivery around a more accountable framework. A good way to begin would be axing corporate boards."