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 markcrawf@gmail.com .
Monday, November 22, 2010
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.
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.
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.
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.
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.
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.
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:
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:
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