Rare Gem

The Globe and Mail is pretty pathetic these days (and not in a sympathetic way), but this is pretty awesome.

Yon don't often see this:

"Paris Hilton wears a slitty gown at amfAR's Cinema Against AIDS event during the Cannes Film Festival in Cannes, France, last week."

...preceded by this:

"Thousands of Quebec students march through Montreal to protest university tuition fee hikes. Oh wait. Sorry about that, English Canada. You didn't come here to look at a bunch of self-centred, entitled people who don't know the value of a dollar and obviously crave attention. I don't know what I was thinking. You have no time for those kind of people."

More at the link.

Good News for a Change

I'm a little late getting to this, but I wanted to offer a favourable opinion on the deal struck between Newfoundland and Nova Scotia which will hopefully finally get development started on the Lower Churchill Hydro project. The current deal is only for a portion of the potential power that could be generated at Lower Churchill, but once the undersea cables have been installed to route the power through Newfoundland and into the Maritimes, it seems all that more likely that the remaining potential will be tapped.

In my opinion, if Canada wants to reduce it's greenhouse gas emissions without having to sacrifice anything economically, by far the most obvious choice is to use hydro-electric power (and some wind) to displace our remaining coal plants. It seems as though our neanderthal government has scrubbed the handy list of the worst ghg emitting plants in the county off of the Environment Canada website, but this press release from Pollution Watch has a list of Canada's biggest sources of CO2 in the atmosphere, and it's pretty much a list of the country's biggest coal plants.

So, credit to Danny Williams who's been the driving force behind the development of the Lower Churchill Falls.

Finally, here's a good article in the Globe from Jan Carr that explains how the main thing holding Canada back from fully exploiting it's hydro resources is lines on a map, in particular the lines between provinces.

Crowded Marketplace

From a Globe and Mail editorial today, "Under the Conservatives, Canada has maintained its position of global leadership. ... It may hedge on an issue like climate change, but..."

The Conservatives never seem to get more than 40% of the vote in this country, and the marketplace already has lots of newspapers such as the Sun Chain and the National Joke that serve that portion of the population that believes Canada has shown global leadership under the Conservatives, while 'hedging' on climate change.

I guess it's no shocker that the Toronto Star continues to have the highest weekly circulation in the country. A believer in free-markets might wonder why the obvious opportunity to profit handsomely from running a newspaper that isn't so ideologically right-wing that it prints nonsense like the Globe editorial above continues to remain untaken.

Hornby Bike Lane / Reaction to NDP Governments

Some good news upon my return to Vancouver - I see that city council is going ahead with the separated bike lane on Hornby Street. Given the waffling of the provincial government on the HST, it's nice to see a government forging ahead with a plan despite a swell of ungrounded, yet hysterical opposition.

Speaking of hysterical and largely ungrounded opposition, the Globe and Mail has an excellent post from Gerald Caplan documenting the hysterical opposition that Bob Rae's government faced from business groups and the media when they governed Ontario in the early 1990's. It's too bad that Bob Rae and the NDP conceded so much ground to their opposition, even to the point of not implementing public auto insurance in Ontario. The concessions got them exactly nothing in the way of fairer treatment from the media or less hostility from the business community, so they might as well have stuck to their guns.

Dog Bites Man

Actually, I've lived my whole life as a boy/man, and haven't been bitten by a dog yet. But a Neil Reynolds column that is a deliberate lie meant to deceive readers of the Globe and Mail into believing something that isn't true, I have seen. Many times.

Greg documents the latest, Reynolds suggesting that Canada shouldn't have a mandatory census because the Scandinavians don't, when anyone who's paying attention at all knows that if Canada wanted to adopt the Scandinavian system (where the government collects so much information on everyone that they don't *need* a census), Reynolds would be the first person fighting against it.

To be honest, given that the Globe and Mail continues to employ Neil Reynolds after years and years of every column of his being either an attempt at deception or hilariously bad advice, it's hard to take anything in the paper seriously, or believe that the editors really have any concern whatsoever for producing a publicly useful product as opposed to just selling papers.

Even if the Globe wanted to make the argument that Reynolds is useful in a George Castanza, do-the-opposite, sort of way, like a compass that always points South, surely they could just provide his advice on what (not to) do directly to policymakers, without taking up valuable newsprint and possibly temporarily fooling people who are reading the Globe for the first time, or those poor folks with an IQ under 50 who haven't yet figured out that they should ignore (or do the opposite of) everything Reynolds says.

Non Sequitur

The Globe and Mail has one of its business section articles where it tacks a bunch of different stories onto one another...

The first story is about the housing market and starts,

"National Bank of Canada worries that the impact of rising interest rates on the residential housing sector “could be dire” in Canada. 'Though the Bank of Canada has done well to set its rate normalization process in motion, the fact remains that the stakes at play are high, with home prices and household debt at record levels relative to income,'"

The second story is about what's the mind of our finance minister and starts,

"Finance Minister Jim Flaherty says a solution to Europe's debt problem will be the top issue for the G20 summit in Toronto this month."

I hope Mr. Flaherty remembers that we have debt problems of our own...

Cheap Shots

Neil Reynolds, August 15, 2007, Globe and Mail:

"What's the best way to expand a welfare state, irrationally assuming for the moment that you want to expand a welfare state? Cut taxes. Especially cut corporate taxes. You will collect less revenue every time you nick a dollar but you will have many more dollars to nick - and you will almost certainly find yourself with more tax revenue than you know what to do with. Iceland is a good example."

Willem Buiter, January 21, 2009, Financial Times (London):

"Iceland’s largest three banks with border-crossing activities collapsed last fall, as did its currency. The three banks are in administration and new state-owned banks with a purely domestic focus have been set up. Strict capital controls make external borrowing all but impossible and discourage foreign investment. The country now has an IMF program.

...

Iceland’s government had to let the country’s three main banks go into administration because it did not have the fiscal capacity to bail out financial institutions with balance sheets amounting to 600-700 per cent of annual GDP. Any attempt to commit further government resources to the rescue of the banking system would have precipitated a sovereign default.

...

The excesses in Iceland during the past decade were greater than in the UK, but not qualitatively different. In both countries, the regulation of banks was laughably lax.

...

Households were permitted, indeed encouraged, to accumulate excessive debt - around 170 per cent of household disposable income in the UK, over 210 percent in Iceland.

...

Both countries permitted the real exchange rate of their currencies to become materially over-valued, more so in Iceland than in the UK, but still to a worrying extent even in the UK. The same version of the ‘Dutch disease’ - the crowding out of the non-financial internationally exposed sectors (exporting and import-competing) by the excessive growth of the financial sector and the construction industry - occurred in both countries, again to a greater extent in Iceland than in the UK, but to an highly undesirable extent even in the UK. Iceland’s gross and net external indebtedness are much greater than that of the UK, and its current account deficits during the years just prior to the crisis were much larger than those of the UK.

Both countries pay the price for the hubris of policymakers who believed that they had engineered the end of boom and bust and replaced it with perpetual boom. The risks associated with asset market and credit booms and bubbles were dismissed (”how can you be sure it is a bubble? Do you know better than the market etc.”). In neither country have the responsible parties (the prime minister, the minister of finance, the governor of the central bank and the head of banking regulation and supervision) admitted any personal responsibility for the disaster. Instead we are told tales of a once-in-a-lifetime calamity, coming at us from abroad, that ruined a perfectly sensible and sustainable set of domestic policies, regulations, rules and arrangements. As if!"

Neil Reynolds, January 9, 2009: Globe and Mail:

"Why Government Can't Stop Market Crashes"

The man really has no shame. But of course there are always going to be ideological hacks who move on blithely from failed prediction to failed recommendation and back to failed prediction without ever a word of apology, a reconsideration of their premises or a questioning of the ideology that blinds them. The question is why the Globe and Mail thinks one of these people should be one of their columnists.

Down With The Print Media

One of these days, I may or may not get around to writing a post on the ongoing decline of the newspaper industry covering topics such as, will newspapers disappear in their current form (yes) and will it be a good thing (probably).

A year ago, I likely would have been more favourably disposed towards the print media, but, as impossible as it might have seemed 12 months ago, the most recent year has lowered my opinion of them significantly.

Two of the main catalysts for this change in attitude were the media treatment of the coalition government (when the media was scared into showing its establishment roots, fronting absurd push polls, calling the NDP commies and screaming for daddy figures to ride to the rescue) and the media coverage of the Green Shift.


For example, consider this from the Globe and Mail's year end / next year look-ahead editorial, "The Liberals were all too happy to accuse the Tories of inaction [with respect to the economic crisis], but did not offer alternative policies so much as the promise of consultation, and refused to move away from their Green Shift plan despite how ill-timed a risky wealth transfer would have been."

"a risky wealth transfer" So, in what way was it risky? In all its coverage, did the Globe identify a single risk from the plan? What might such a risk be? We've had increases in gas taxes over the last 30 years many times, we've had cuts to income taxes many times. As far as I know there hasn't really been any particular risk to such moves.

And also "ill-timed" Why was it ill-timed? Because carbon prices were plunging? But wouldn't that be the ideal time to implement such a shift, to preserve the incentives to conserve? Because the economy was deteriorating? But what difference would the source of taxation matter to the economy - and to the extent that the shift was progressive in nature, wouldn't it mitigate the economic slowdown by putting more money in the hands of those likely to spend it?

The truth is, the person writing the Globe editorial didn't consider these questions. It never occurred to them that to use words that had an actual meaning in reality, they simply were looking to criticize the green shift, didn't want to point out that it was good policy supported by anyone who understood the issues and was unpopular thanks to demagoguing politicians who were amply enabled by the media, and simply picked a few empty words to fill in their sentence such as "ill-timed" and "risky", before moving on the next point.

Consider that this is the Globe and Mail, arguably one of the better newspapers in the country (it's a relative measure), and in their year end summary they have nothing but a few words of offhand, meaningless bs to offer with regard to one of the most important policy debates we faced this year.

As I said, this topic needs a more thorough coverage - I haven't really explained my full thought process in this post, I'm just typing out my impressions. It could be that this is all just sour grapes on my part that a policy I think is a good one was treated with disdain by the media. And maybe newspapers contribute enough of value that they're worth preserving (any suggestions what that value might be?). Or maybe whatever might fill the vacuum if they disappeared (crap like this) would be worse. But more and more I'm convinced that newspapers do more harm than good and that it will be a cause for celebration when they are delivered for the last time.

Zeno Has Nothing On These Guys

The Globe Editorialists ponder an apparently perplexing paradox: On the one hand, Canadians have a higher propensity to save then Americans. But on the other hand, Canadians have more savings than Americans. A tough one, I know.

In the Globe's words,

"The difference here is not huge, but it is consistent and significant. For example, Canadians and American consumers are four percentage points apart when asked whether they intend to spend less in 2009; in Canada, 62 per cent said yes, as against 58 per cent in the United States. Other questions yielded similar answers.

The contrast is striking not only in the light of the comparative health of the Canadian economy as a whole. When, more specifically, the economic conditions of households in these two North American countries are considered, levels of debt and net worth are more favourable in Canada than in the U.S., which means that Canadians are paradoxically better able to spend, but less willing to do so."

It's a puzzler all right, we might need to invent another branch of mathematics to solve this one*.

This is part an editorial where the Globe chides Canadians for not doing their rock and rollpatriotic duty by taking on more debt and spending more money in order to keep the economy growing.

Says H & Mthe Globe,

"Canadians should spend wisely, but spend nonetheless. They might reasonably cut back on some immediate pleasures, but they should think seriously about taking advantage of lower or stable price levels. Pleasure may be compatible, however, with quality and durability; consider women's clothing, for example, the prices for which fell in 2008 in Canada."

I'd respond but someone has already said all that needs to be said in the comments,

"Wait a minute ... Americans basically CAUSED this worldwide problem by being too willing to spend more money than they had, getting into unsustainable levels of debt, and now it's a problem that Canadians are more cautious in their spending than the most reckless consumers on the planet?

Nuh-uh."

On a final note, is it too early to nominate 'paradox' as one of the most overused words for 2009? It's been a perfect storm of paradox references in my recent reading.

---
* It took the development of calculus to solve many of the paradoxes posed by Zeno in ancient Greece.

CAtO vs. the Globe and Mail

The Globe and Mail, before the election, endorsing Harper:

"Indeed, the most important characteristic Mr. Harper has shown over 33 months in office is a capacity to grow. There is no reason to think he won't continue along the same trajectory if re-elected — a good thing, too, since there is much more for him to learn.

Instead of carping about a dysfunctional Parliament, for which he holds much responsibility, Mr. Harper should throw out his previous playbook and try making the institution work. It would mean displaying the confidence to operate outside his comfort zone of near-absolute control, but it is a mission built for a true conservative. And, no, Senate reform is no substitute for getting the House of Commons operating well."

Me, before the election, not endorsing the Conservative party:

"in my opinion, the Conservative party wishes to remake this country into one much more similar to the U.S., as opposed to the 'second tier socialistic country' (in Harper's words) that it is now (in their opinion).

But in pursuing this goal the Conservatives see the traditional institutions, the checks and balances as things that stand in their way. So, far from wanting to reinforce the strength of Canada's independent institutions that check the government's power and to work within the system, the Conservative's want to weaken those institutions and remove anything that prevents them from remaking the system as they wish.

In government we have seen the Conservative party at war with the media, at war with Elections Canada, in a battle with the nuclear energy safety regulator and further Conservative government will lead, in my opinion, to more attacks on and more weakening of, the independent institutions that provide a check on the government."

So here we are, faced with a serious economic crisis, and Harper decided that it was a good time to try and weaken some of the institutions (unions and opposition parties) that keep the Conservatives from unfettered rule, and now, when he has obviously lost the confidence of the House of Commons as a result, Harper vows to 'use all legal means' to resist bowing to the will of the majority of our elected representatives, and we see newspapers articles seriously considering having Harper fire the Governor General rather than give up the reins of power.

I'd score this CAtO 1, Globe 0.


--
On the other hand, when I wrote that, "Harper has a de facto majority for at least the next two years since nobody will want to trigger another election." I wasn't predicting that Harper's second vote would be a confidence motion on bankrupting all three opposition parties, so I missed that one.

Tell 'Em Ed

Ed Broadbent makes the case for updating our archaic election system.

Garth Turner on the housing market

I'm somewhat indifferent to former Conservative, now Liberal, MP Garth Turner, but I have to admire his candour and bluntness in assessing the current state of the Canadian housing market in the Globe and Mail online chat.

Best quote:

"Sue W: We might never be able to sell, except to a greater fool? Never Sell? Please Mr. Turner, could you please provide a few examples of some properties which have NEVER sold.

Garth Turner: Did I say that? Think not. As with stocks and mutual funds, there's always a buyer for real estate, at a current market value. For example, a share of Bear Stearns was worth $170 last year and $30 last week. On Sunday it sold for $2. If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver."

Credit, Where Due

In a recent post, I criticized globe columnist Margaret Wente for only taking on easy targets, so it is only fair that I mention her most recent column, "Would You goto Jail for Karl Rove", in which she criticizes both Karl Rove, strategist for George Bush, and the media in general, neither of which can really be classified as easy targets, although criticizing Bush and company from Canada is not nearly as risky as doing it from within the U.S. Also, it's not exactly brave to pile on Karl Rove at this late stage and her criticisms of the media are fairly mild and indirect but it's still a step up from taking on scientists and unnamed activists, so I thought I should mention it.

The Price of Everything and the Value of Nothing

Last week, over at Voice in the Wilderness, guest blogger Princess Monkey had a perceptive post up titled, "Sucks to be Her", in which she reacted to Margaret Wente's column which denigrated the efforts of Bob Geldof and his "digging a hole to nowhere".

Said Princess Monkey,

"Margaret goes on about "Saint Bob" and how his efforts to help the African people amounted to nothing. The only thing that amounts to nothing is her column - and perhaps her sense of basic human kindness. Thankfully, her kind of cynicism can't compete with whatever it is that drives people like Geldof and Bono to do what they do. She looks at them and sees "arrogance" - others look at them and see hope. Sucks to be her."

Whereas my immediate reaction was just to the nonsense of the words (in Wente's column) themselves, Princess Monkey looked a little deeper to wonder just how cynical someone had to be to write something like that.

Anyway, Wente was back earlier this week writing about the noble efforts of Bill Gates to use his considerable fortune to effect positive change, in Africa and around the world.

Now most people would just leave it at that, feeling that it was enough to write a positive column praising someone's good work, and maybe suggesting we try to learn from what works in their approach. But with Wente, praising Gates seems to be just a device which allows her to criticize others. She opens with, "Who's saving more African lives these days than anyone else? No, it's not Mahatma Bob. It's not the Western governments that keep funnelling billions into the Swiss bank accounts of arms dealers and African dictators, or even those well-meaning NGOs with their well-digging projects."

One paragraph in and she's already mocked the efforts of Bob Geldof, everyone who's ever been involved in development work funded by the government and everyone who's ever been involved in development work not funded by the government (condescendingly referred to as 'well-meaning').

Then she actually talks a bit about Gates before relapsing with,

"His appearance at last weekend's Live 8 concert in London left some critics frothing. "The super rich got their wealth by heading a system of exploitation and imperialism which shatters the poor and wrecks lives -- not least in Africa," frothed one. "Will feigning concern for those less fortunate provide some nice PR for your predatory software juggernaut?" frothed another."

Aside from the use of 'frothed' three times in one paragraph when zero uses would have sufficed, what is the point of quoting these unnamed frothers? Surely we could find a couple of unnamed people to froth about just about any topic, especially one as famous as Bill Gates.

You wouldn't think this topic has much to do with global warming, but Wente finds a way to work it in,

"The other meaningful thing Mr. Martin could do is take all the money we're wasting on our futile effort to stop global warming and turn it over to the Gates Foundation. Global warming may or may not threaten our way of life a hundred years from now; no one really knows."

There's more, including a rant against governments which are against genetically modified plants but I grow weary. I could spend all day talking about the good which has come from Bob Geldof's efforts, about the good work which has been done by people funded by the federal government's aid programs, about how global warming is already affecting people's way of life right now, how efforts to prevent global warming are critical, how in a 100 years global warming, if left unchecked, could be destroying our way of life (not to mention any number of species), how Gates foundation might not be so effective if it became politicized and about the risks of genetic engineering, and the reasons why many people feel genetically modified food is a technology which should be used sparingly, if at all, and on and on, but, having read Princess Monkey's post, I now simply wonder about Wente's motivation in writing such mean-spirited columns as she has been doing lately.

Perhaps she is simply emulating Rex Murphy, affecting the attitude of the contrarian who doesn't 'fall' for the conventional wisdom. The thing is, when I think of contrarians I think of a Socrates or a Voltaire, the brave soul who takes on the establishment and (as usually happens when you take on the establishment effectively) ends up being punished for their actions.

What's really sad about Wente is that, while she portrays herself as the outsider bravely taking on the powerful, in actual fact she somehow, unerringly, always seems to side with the powerful against the weak. Far be it from Wente to take on the oil companies and their propaganda 'science' or the biotech giants like Monsanto who seek to patent both food and life itself. Instead look for her to take on unnamed protestors who froth at the mouth, pop stars who try to improve the world, and of course, the easiest target of all, our federal government.

This is perhaps an overly personal observation, but I think Wente might benefit from spending some time in the arctic, seeing first hand how human and animal lives are already changing to keep up with the climate. Then maybe spend a couple of days following around Bono or Bob Geldof as they work tirelessly to use what influence they have to make what positive changes they can, even if they don't have billions of dollars of their own to spend on it. Best of all, maybe go to Africa and spend some time digging wells with those 'well-meaning' NGO's. And maybe when she got back she would have left her phony contrariness and her deep, unpleasant cynicism down at the bottom of one of those wells where it belongs.


-----
At the risk of insulting my readers' intelligence, I should note that the title of the post comes from Oscar Wilde's famous assertion that, "A cynic is a man who knows the price of everything but the value of nothing."

I suppose Wente might reply (as the character in Wilde's work does), "And a sentimentalist is a man who sees an absurd value in everything, and doesn't know the market price of any single thing.", but I don't think Wilde was implying (nor do I myself think) that those are our only two options.

Productivity Puzzle

Jeffrey Simpson had a column (subscribers only but I've quoted the relevant parts) in the Globe last week on productivity. His main point seemed to be that politicians should spend a lot more time talking and worrying about productivity.

Says Simpson,

"One word should figure in every major political speech, whether from the left or the right.

The word scares people. It is poorly understood, or at least capable of multiple definitions. It isn't sexy. Nobody ever got elected talking about it -- at least not yet. But on this word, and on the ideas that lie behind it, depends our future prosperity and our ability to pay for social programs and to make our way in an increasingly tough, competitive world.

The word is productivity. Yesterday, for example, Conservative Leader Stephen Harper gave his end-of-session speech, chastising the Liberals, of course, and hinting at policy directions for his party. Not a word about productivity.

Mr. Harper is not alone. On the Liberal benches, only a couple of ministers such as Ralph Goodale or David Emerson dare mention productivity. As for the Bloc Québécois, forget it. Ditto for the NDP."

Now I don't deny the critical importance of productivity. After all, we all want to be paid more and the upper limit on how much someone can be paid is how much value they produce. And the two determinants of the value of what you produce are how long you work and your productivity. If you're like me, you'd prefer to make more money without having to work harder so productivity increases are generally the best bet for an improved standard of living.

But here's the thing: say I had to compare the importance to me of having a properly functioning liver vs. the importance of choosing the right clothes to wear in the morning. Obviously the liver is more important. But, given that I know very little about how my liver really works, that it seems to do its own thing without any intervention from me and that I wouldn't know where to start if I wanted to make decisions with my liver in mind, and that I wouldn't really know how much of an impact my actions would have, there's not much sense in me worrying too much about my liver on a day to day basis.

On the other hand, my clothing is fully under my control and I have a pretty good grasp of how some choices might work out and others wouldn't (although my girlfriend may disagree with this assessment).

As economic stats go, productivity is one of the most mysterious. Simpson is worried by the unexplained decline in Canadian productivity over the last few years (2000-2004), especially as compared to the U.S. Simpson seems to be especially worried by a study (which he of course doesn't provide a link to) by Andrew Sharpe and Jeremy Smith, of the Centre for the Study of Living Standards, and Someshwar Rao of Industry Canada - a study which specifically tries to figure out the source of this discrepancy. Simpson quotes the study authors,

"Current productivity developments are troubling, and if they continue, Canada's future prosperity is threatened, both in absolute terms and relative to other countries."

Simpson goes on from here to say,

"The core of better productivity is human capital development. Of course, it's also using materials more wisely, upgrading technology, working more collaboratively, restructuring work, ensuring competitive tax levels. But it's mostly about winning the battle of minds and skills in the global world.

Government policy should be measured against two questions: How does this improve our country's human capital development? Does this policy improve our connectedness and competitiveness with the global reality of tomorrow? To ask these questions is to throw out the window most of what the Martin government has done and what the opposition Conservatives propose."

But this series of abstract statements, while all very well, and a good summarization of the last 150 columns written by David Crane in the Star, doesn't really have much connection to the study he referred to earlier.

If you read the study (which, like always, I recommend - it's not that long and pretty easy reading) a different picture emerges. Here are some quotes:

"A definitive explanation for the recent interruption in productivity growth in Canada has proven elusive. But it would be premature to interpret recent developments as a downward shift in trend productivity growth.

In the last decade,Canada has suffered no major macroeconomic shock (excluding exchange rate shocks) and undergone no policy development or reorientation that would have had significant and long-lasting ramifications for productivity growth. Indeed, it can be argued that both the macroeconomic and micro-economic policy environments, characterized by stable inflation, falling debt/GDP ratios, budget surpluses, orporate tax cuts and increased federal funding for post-secondary education have become more, not less, productivity friendly."

Looking into the puzzle in more detail, we can see that while productivity (output/hour) has grown faster in the U.S. over the last 4 years than in Canada, the change in output has been almost the same between the two countries. Which of course means that the big shift has been towards Canadians working more hours than Americans. From the study:

"Business sector hours worked in the United States actually fell at a 1.0 per cent average annual rate over the 2000-2004 period, compared to a 2.1 per cent average annual rate of increase in 1996-2000. This decrease in total hours worked also lies in stark contrast to the increase in total hours in Canada,especially given that both countries experienced on average the same output growth over the period.

Total hours worked fell more than 2 per cent in both 2001 and 2002,with the loss dropping to 0.5 per cent in 2003 before reverting to an increase of 1.1 per cent in 2004. The decline in business sector employment in the United States after 2000 was less dramatic than that of hours. Employment fell at an average rate of 0.5 per cent from 2000 to 2004, well down from the robust 2.1 per cent rate of employment growth in 1996-2000 and in marked contrast to the 1.7 per cent increase in employment in Canada after 2000. Again, the employment loss was largely concentrated during the first two years of the period (-0.8 percent in 2001 and -2.2 per cent in 2002).

It's not hard to see why this gap in employment/hours might have occurred:

"Since 2000, profits have been at record levels in Canada, averaging 12.4 per cent of GDP. In contrast, profits have been at low levels in the United States, averaging 8.7 per cent. It may not be coincidental that during this period labour productivity growth decelerated in Canada but accelerated in the United States, as profitability affects firm behaviour, which in turn influences productivity.

The near-record low profits in the United States appear to have prompted employers to undertake workplace reorganization and to downsize employment levels in an attempt to reduce costs. The declines in U.S. employment in 2001, 2002, and 2003 attest to this desire on the part of employers to run a lean operation. Indeed, Gordon (2003:247)cites the unusual degree of downward pressure on profits as one of the two most compelling hypotheses to explain the post-2000 productivity growth acceleration in the United States.

As for the explanation of the difference in profits between Canada and the U.S., the obvious candidate is the big difference between our economies - Canada's is much more dependent on commodity prices. As the study notes, commodity prices have been 'booming' since 2000. Not only does increased profits reduce the need for companies to fire people, but it also depresses productivity in another way as well,

"As commodity prices rise, natural resource extraction industries have an incentive to exploit ever more marginal resources,since even minimal increases in production can have a large positive impact on profits. In general, profitability trumps productivity as an objective for firms. Normally the two objectives go hand in hand, but when they diverge,as for example when commodity prices are extremely high, the productivity of the natural resource sector suffers. This feeds into poorer productivity growth in the natural resource sector as a whole and,in turn, at the aggregate level (CSLS,2004). It is important to not however that a productivity deterioration arising from higher commodity prices is not necessarily bad for
income because of the improvement in the country's terms of trade."

Other possible culprits from the study are a slowdown in foreign direct Investment and a slowdown in business investment in technology (especially in IT).

Even with all this reasoning, the study authors remain, as quoted above, somewhat mystified by the numbers and even seem skeptical that they are right.

"It is important to underline that the productivity estimates discussed in this article are subject to revision, and these revisions can be significant. Indeed, in the six years between 1997 and 2003,there was an average annual upward revision of one percentage point between initial and current productivity estimates (Kaci and Maynard,2005)."

..and later,

"These conclusions should be considered tentative for two main reasons. First, as noted earlier in the article, Statistics Canada has in recent years revised its productivity growth estimates in an upward direction and to a considerable extent. Although this article employs the most recent data available at the time of publication, future historical revisions could significantly affect productivity estimates for the 2000-2004 period. Thus, our analysis and conclusions are subject to change if significant data revisions take place."

Talk about hedging your bets!

So what's my point? My point is that it's easy for Simpson to say that politicians should be talking about productivity and shaping policies around improving it, but it quickly gets hard when you actually look closely at productivity and try to understand what drives it. Simpson himself gets confused when he says that,

"[we have had essentially zero productivity growth over the past two years], that's fact. And zero productivity means zero growth in real incomes, jobs, prosperity."

If the study demonstrates anything it's that growth in jobs and too much prosperity (for companies) is a big part of what's keeping productivity down!

Maybe a politician is going to go out to the summer barbecue circuit and say,

"We have to increase productivity growth in Canada. That means driving down commodity prices and corporate profits so that companies need to lay people off and get lean and efficient. Plus we have to intervene even further in the market to bias business towards investing in machinery so they can get more productive instead of hiring so many more workers. Of course we're not sure if our numbers are even right, or if our suggestions will even work, but still, productivity is king, and I'm talking about it, you bet I am..."

Maybe, but I doubt it.

The study concludes as follows,

"..future trends in living standards in Canada are largely in the hands of Canada's private sector, as there is little governments can do to force businesses to pursue productivity improvement when this is not consistent with profitability objectives. Nevertheless, Canadian governments can facilitate productivity-enhancing investments by fostering a highly competitive business climate."

(emphasis added)

I'm sure our business leaders (led as always by Thomas d'Aquino) will be sending out the message loud and clear that what Canada really needs in order to be prosperous is a more competitive business climate. Look for the bosses at Westjet and Air Canada to be promoting the opening of the skies to foreign carriers. Look for the big bank heads to be asking the government to say 'No' to mergers and 'Yes' to more foreign competition. Look for all business leaders to agree that record high corporate profitability (and the accompanying record high CEO compensation) has been dragging down productivity and that something must be done.

Simpson may want politicians to talk about productivity all the time, but on an issue this murky and complex I wouldn't be surprised if they just continue to generally avoid mentioning it for the most part, sticking to things that they understand and that they can actually change for the better - and to be honest, that's fine by me.

The Missing Link(s)

In the comments to a recent post, I mentioned my desire to start writing more letters. I'm starting small with the following brief (but wordy, as I always get when writing letters for some reason) note which questions why the media (the Globe and Mail in this case), so stubbornly refuses to provide links to the studies/reports etc. which they mention in their stories - even when these sources are freely available on the internet.

---

Dear Globe and Mail,

In reading your paper I have noticed that articles and columns therein often make reference to external reports, papers and studies. For example, Doug Saunders' column on July 2, 2005, "To make poverty history, remember the history of poverty" has the following passage, "The G-8 leaders seem to have made a similar realization, and the report of the Commission for Africa (available on the Web) is actually a brilliant distillation of this discovery."

My question is, why include the text "(available on the web)" instead of providing the address directly
("http://www.commissionforafrica.org/english/report/introduction.html")?

I don't intend to single out Saunders since this is by no means an isolated example and indeed, mentioning that the study is available on the web at all seems to go beyond the usual standard practice of complete silence on the availability of the report.

I find this behavior especially irritating in the online edition of your paper, for which you can assume that everybody reading the article in question has internet access, and for which the text of the article itself could be hyperlinked, thus avoiding concerns with long, cryptic URL's.

Presumably, if the reader is expected to be interested in the commentary on the study/report in question, it seems reasonable to think they may want to read the study/report itself. Perhaps there is a legal concern with linking to outside sites (although I don't see how this would apply to sites like 'The Commission for Africa') or perhaps there is concern that the links might change or disappear over time, but I think anyone who uses the internet regularly appreciates that old links don't always work.

Speaking for myself, I would strongly prefer if you provided URL's for the studies/reports you refer to and saved me the trouble of tracking them down myself. When writing on my blog, I always make an effort to provide links to the material I am discussing - it is only common courtesy. For an organization such as yours which should always be looking for easy ways to provide greater value to readers, it would seem to not only be courteous but good business sense as well.

I await your response, in puzzlement at why the nation's largest media outlets seem incapable of meeting standards which even the humblest of blogs takes as a matter of course.

Sincerely,
Declan Dunne,
Vancouver.

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While I'm writing, I should mention that the article by Saunders was worthwhile, tracking the failure of various ideologically driven economic movements in Africa through the decades and coming to the unsurprising conclusion that poverty is a complex problem which requires complex, pragmatic, experience-driven solutions in order to be successfully addressed:

"African states could now look at their once-blighted neighbours in the Indian subcontinent, in China and in South America, all of whom had used a smart mix of government redistribution, regulatory control, and economic freedom and open trade to bring themselves out of poverty." ... "For Africa, it marked the end of almost 60 years of theories, all of which led to more poverty."

Contempt for Science

Jonathan does a good job showing how Margaret Wente got suckered by the global warming skeptics (specifically, mining consultant Steve McIntyre) in today's Globe (available online to ripoff victimssubscribers only).

I just wanted to add a couple of notes of my own to reflect the clear contempt for scientists which the article displays.

Wente suggests that McIntyre can be trusted to be honest because,

"Unlike almost everyone else in the highly charged climate-change debate, Mr. McIntyre has nothing personal at stake. He doesn't need to advance his career or get research grants."

(note to anyone who currently takes any medication: it's probably a bad idea since the scientists who came up with it were probably just trying to advance their career or get research grants).

Perhaps the most absurd comment is from McIntyre when he says, "he is astonished that climate science isn't subject to the same audits and due diligence that are carried out in any ordinary business."

Right, that's what I always hear: those silly scientists with their researched papers and their peer review process and their international panels and conferences. When will they learn to apply the same rigour that business does in coming to conclusions? Seriously, what planet is this guy on (oh right, the one with no global warming).

Later on, we get this:

"But wait. Don't most scientists still believe in the perils of man-made global warming? "Sure," says Mr. McIntyre. "And most stockbrokers believed in Enron."

I'm not really sure what to say here, but if we're comparing the work of scientists studying nature to stockbrokers studying a company which was actively doing it's best to deceive them, well, let's be kind and say it's not the best analogy I've seen lately. (perhaps I should go into more detail explaining why scientists may be a bit more reliable than stockbrokers, but if it's really come to that, I'm probably wasting my time trying to stem the tide of anti-science attitudes).

Finally, another quote from McIntyre,

"He says that most scientists haven't analyzed the data, and that scientists, like everyone else, are subject to peer pressure and groupthink. "Just because everybody thinks something's true doesn't make it true."

'Just because everybody thinks something's true doesn't make it true' - what a great argument. Could someone please point out something, anything which you couldn't use that line to argue against? "Baseball fans, like everyone else are subject to peer pressure and groupthink. Just because everybody thinks that Bonds is a good hitter doesn't mean he is." Give me a break.

Putting it together, Wente is creating the impression of the little guy from the margins taking on the establishment of all these scientists who are just pretending that global warming is serious or believe it only because they haven't taken the time to think about like McIntyre has. And the reason so many scientists have abandoned their principles of seeking the truth and supporting dissent is because they are just saying what they think people want to hear so that they get money for their grants or advance their career.

If I was a scientist of any kind, I'd be pretty offended by this attitude. And that's even without considering the track record of McIntyre which, to put it politely, isn't too convincing. Go read Jonathan's post, follow the links and see for yourself.

OK, I lied

I know I said I wouldn't say anything else about the budget, but given that one of the last things I wrote was:

"Where I feared that the distant plans actually would be implemented, most [everybody else] derided the government for even making such unlikely to be implemented plans. I guess we'll see how things go over the next few years.",

I couldn't pass up mentioning Jeffrey Simpson's recent column (overpriced subscription only) in the Globe in which he says,

"Only a prime minister with a fierce will, or a sharply different ideology, could adjust, let alone shatter, the iron framework of spending set by the 2005 budget."

And while I think his conclusion that,

"Politics will be about debates at the margin of things, or about value-laden social issues that don't cost money, because the cupboard for years to come has already been stripped bare."

is a bit over the top, if the next few budgets keep adding on another 5 years worth of spending/tax cut increases each, he may not be too far off. Anyway, I was starting to doubt my own reaction after it turned out to be such a minority opinion so it's nice to see a similar opinion offerred up by someone who's been following this stuff way longer than I have.

The Conservative Media - Part 2

Since I'm on the topic of media bias, I thought I'd go back and take a look at the one good information source I know of regarding media bias in Canada: the Observatory on Media and Public Policy, based out of McGill University, which tracked reporting in 7 newspapers during last year's Federal election.

If you like going to the source, I recommend downloading the spreadsheet (link at the site) with the nuts and bolts of their analysis.

(Aside: If you'd prefer to read a really dull, myopic viewpoint of the election campaign as it unfolded, I recommend reading the discussion from their 'roundtable' of pundits.)
---

During the campaign there were 2,113 articles written about the election in the 5 English newspapers studied (The Calgary Herald, The Globe and Mail, The National Post, the Toronto Star and the Vancouver Sun).

Of those 2113, 1,711 (81%) mentioned the Liberal party. Out of those 1,711, there were 34 (2%) with positive mentions of the Liberal party and 342 (20%) with negative mentions of the Liberals, giving a 10 to 1 ratio of negative mentions to positive.

Meanwhile, for the Conservative Party, the figures were 1592 (75%) total articles, including 82 (5%) positive mentions and 159 (10%) negative mentions, for a roughly 2:1 ratio of negative to positive.

The NDP garnered (4%) positive mentions and 7% negative mentions, while the Bloc had the most favourable(!) coverage of any party from the English language papers at 4% positive, 5% negative (although they were only mentioned in 15% of stories).

Of course there may be any number of explanations for these results including the media rooting for the underdog, the media following poll shifts, a general unwillingness to praise the governing party, poorly/well run campaigns and so on. Still, it seems hard to say that media bias was anything but harmful to the Liberals.

It's interesting to look at the numbers by newspaper:

The Calgary Herald mentioned the Liberals in 76% of its election articles, with 0%(!) containing positive mentions, and 23% containing negative mentions (note: they did have one article with a positive mention, but it still rounded down to 0%).
Meanwhile they mentioned the Conservatives in 77% of their articles, of which 8% had positive mentions and 4% had negative mentions.

Globe and Mail: Mentioned Liberals (85%), positive 1%, negative 17%
Mentioned Conservatives (75%), positive 2%, negative 11%

National Post: Mentioned Liberals (81%), positive 1%, negative 35%(!)
Mentioned Conservatives (69%), positive 13%, negative 4%

Toronto Star: Mentioned Liberals (85%), positive 4%, negative 15%
Mentioned Conservatives (79%), positive 2%, negative 19%

Vancouver Sun: Mentioned Liberals (77%), positive 1%, negative 15%
Mentioned Conservatives (76%), positive 4%, negative 10%

Together, the Herald, Post, Sun and Globe combined to write 1305 articles about the Liberals with a grand total of 11 including positive mentions. Meanwhile the Post and Herald alone combined for 55 articles with positive mentions of the Conservatives.

So what does it all mean? - well, not a whole lot without having more elections to study, but next time you hear someone say how the media were out to get the Conservatives you may want to have a little chuckle. Also, you can see just how far out in bias land the Herald and the Post are while the Globe and Sun were closer to the Centre (although still anti-Liberal). Of all the papers, the Star was the closest to having equally negative coverage for both the Liberals and Conservatives, but it did have a slight pro-Liberal lean (vs. the Conservatives).

There's lots more info in the spreadsheet such as a breakdown by issue ('Accountability' got by far the most press, followed by Health Care, Social Issues, Tax Cuts and finally International Issues), a breakdown by type of coverage (52% horserace, 43% issues, 4% other - how sad is that?) and a daily tracking of all the articles (not to mention the raw data itself in case you feel like doing your own analysis.)

If only there were more of this kind of data available...

What's Better Than a List?

So as the House of Commons shuts down for Christmas, I have to say that the minority government is going pretty well so far. They managed to sneak in a stocking stuffer for Canadians before they wrapped up, re-introducing into the house a proposal to create a 'Do-Not-Call' list which would allow people to tell telemarketers to leave them alone.

Apparently the only big hangup remaining (besides the usual public consultations) is the decision on whether or not to include charities and surveyors (especially political ones) on the list.

As John Ibbitson says in his globe article(for willing to be gouged subscribers only):

...there is no important obstacle, apart from figuring out the exemptions, to the swift passage of this legislation and the creation of the registry. Even with the obligatory round of public hearings, with any kind of luck, the registry should be up and running by early 2006. For every Canadian who has risen from the dinner table to answer the phone, only to slam it down in wrath, the day cannot come too soon.

Now don't get me wrong, the list is great - a no-brainer really - but I don't really see any reason why instead of a list we can't have a table (i.e. a spreadsheet for you computerized folks out there).

In the first column would be your name, just like on the list. Then in the second column you could have a check box for telemarketers (Y = telemarketers can call me, N means they can't). Then in the third column, you have a check box for surveyors, possibly a separate one for political surveyors. Finally in the last column you have a check box for charitable organizations.

Seems simple enough to me. Problems?

Now a really ambitious plan (I analyze data for a living, so I tend to be a bit of a geek about this stuff, so bear with me) would be to add a column with an hourly rate.

People would be able to call you, but they would have to pay you your going rate for your time. Because really in the end this is all about power. Should people have the power to invade your home life at any moment for their own selfish purposes - of course not. Should we have the power to define in detail the terms on which we are willing to participate? Sounds good to me.

today's moral: One column good, four columns better.


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As an aside, I loved the name of the bill, "Bill C-37, an Act to Establish a Do-Not-Call List for Telemarketing" I think a general rule in politics is that when the names of the bills are such a clear straightforward description of what the new law will actually do, the government is on the right track. And vice-versa.

I remember when the Harris government in Ontario introduced the 'Tenant Protection Act'. Now, if the government wants to shift the balance of power from tenants to landlords a little bit, I am not necessarily opposed to that. (Trust me, I could tell you some horror stories about the rules here in B.C. and how they can unreasonably tie a landlord's hands to the detriment of some of their tenants, but that's another story). If the Harris and co. bill had been called the "Landlord Relief Act" I still would have opposed many of its more poorly thought out provisions, but I would have respected the government's integrity. But to introduce that bill and to call it the 'Tenant Protection Act' was a clear declaration that they knew the people of the province wanted Tenant Protection, while at the same time they were giving them something else. That I can't respect.