Saturday, September 03, 2005

Double standards

In the last couple of days, Robert from My Blahg has been slammed by numerous Cons for suggesting that aid dollars should be sent to deal with Africa's famine instead of the U.S.' response to Katrina.

I'd like to point out here the difference between the suggestion of aid to the U.S. now, and the discussion a month back about Canada's aid to China. At that time, a group of bloggers (from across the political spectrum) agreed with Con MP Helena Guergis that Canada should cut off aid to China.

From the CBC at the time:
Guergis asked why the Liberal government is giving money to a country that:

* Has the biggest army in the world.
* Abuses human rights.
* Has the second-largest economy in the world.
* Has a space program.
* Has a nuclear-weapons program.

China doesn't need Canadian aid, and has even been trying to buy up Canadian companies, she said.

The aid going to China included funding to set up a legal aid program as well as food aid to impoverished areas. Some of the funding involved partnerships with government agencies, but all funding was targeted toward trying to improve the plight of the worst-off who hadn't seen the benefits of wealth collection elsewhere in the country.

Given that background, my question for discussion is this: if Guergis' criteria for refusing to give aid are valid, then how can an individual advocate giving aid to the U.S.? (Note that both Guergis herself and at least one blogger have personally taken the position of no aid to China, but aid to the U.S.)

To make it more challenging, I'm not buying any argument that we should respond differently to suffering caused by an emergency than to ongoing problem. The purpose of humanitarian aid must be to respond to humanitarian suffering, regardless of whether an immediate natural phenomenon is one of the most obvious causes. And even if there was a basis for distinction, it would surely evaporate in light of the U.S.' failure to properly fund measures which would have prevented the worst of the suffering. If we're concerned about indirectly supporting bad policy choices in China, we should have an equal concern about doing the same on our own continent.

So, have at it. If China is too rich and powerful to be a worthy aid recipient, why then should we send aid to the U.S.?

I'll mention in closing that I also disagree with Robert's position, for substantially the reason why I disagreed with the majority on the question of aid to China. The fact that there's a lot of wealth elsewhere in the U.S. doesn't mean that the people affected by Katrina aren't in a situation of urgent need. And to the extent that our aid can make a difference, it's entirely appropriate to try to do what we can.

Yes, we should be doing a lot more for Africa as well (i.e. actually meeting the .7% aid commitment). But as part of an effort to strengthen a global sense of community, we should be engaging in all reasonable efforts to try to help the worst-off. And those efforts should be made whether the need is in Africa, in the U.S., or in China.

Within whose means?

From the title of this article, it looked like Ralph Goodale might be sending a (perfectly valid) message of fiscal prudence to Canadians in general. But based on the article itself, Goodale (and his merry band of anonymous sources) is merely trying to lower government expectations again, while not even hinting that individual Canadians should try to live within their own means:
As always, though, Goodale will warn that everything must be done within a tight budget.

And for once, federal finances might be almost as tight as the minister claims.

In the next few weeks, Goodale is expected to announce the surplus from fiscal 2004-05 will be no more than $3 billion - as he forecast.

Sources say that's likely as good as things will get, after a flurry of last-minute adjustments to the books for the year that ended March 31.

Oddly, the sources don't take the time to explain how the government's fiscal situation could have deteriorated in an economy where everybody else's income is improving. Or how Goodale's plan is the least bit radical when the only apparent added funding is in post-secondary education - which, as we should all know, was addressed in the last budget thanks to the NDP's input.

The only other government policy put forward, a plan for streamlining regulation, is a good enough idea. But there's no particular reason for the issue not to have been addressed long ago - and it certainly doesn't seem to be a top-priority issue for most Canadians. Meanwhile, the three top public priorities (health care, the environment and child poverty, according to an Environics poll cited in the article) are ignored.

The other supposedly-fresh initiative to be pushed by Goodale is an increase in private-sector investment in education and research. Which is well and good in theory, but unlikely at best in practice since nothing in the article suggests that the request will be backed by policy supports. With interest rates rising, there's not much reason to think employers will suddenly decide that added training is a good investment at a higher cost now when it wasn't at a lower cost previously.

So, Goodale's plan is a combination of unduly minimizing the federal government's means and role, while simultaneously making demands of other sectors of society to support his vision while the public's priorities get ignored. Somehow this doesn't strike me as the epitome of responsible government.

Finishing the job

While Iraq hasn't yet worked out its new constitution, Afghanistan is far from anything resembling safety or democracy as well:
Suspected Taliban gunmen have kidnapped a district government chief, a candidate in upcoming legislative elections and three others after ambushing their vehicle in southern Afghanistan, police said Saturday...

Taliban rebels have stepped up attacks in the lead-up to the elections, leaving more than 1,100 people dead in the past six months...

Four elections workers and four candidates in the polls have been killed in recent weeks.

The abduction of the five also comes just days after a British engineer and his interpreter were abducted in Farah province in western Afghanistan.

Obviously the problems aren't constrained to any one part of the country, and the death toll (while widely ignored) is still mounting. Afghanistan has always been a military mission worth getting right, but there's an awful lot of evidence that the worthy goals there are slipping beyond reach.

Friday, September 02, 2005

The next best thing

So far, Wal-Mart has managed to delay and close its way out of any unionization. Having conceded temporary defeat on that front, organized labour has found a new way to put pressure on the company:
Having failed to unionize any Wal-Marts, American labor unions have helped form a new and unusual type of workers' association to press Wal-Mart Stores Inc. to improve its wages and working conditions.

With its first beachhead in Central Florida, the two-month-old group is already battling Wal-Mart, the nation's largest corporation, over what it says is the company's practice of reducing the hours that many employees work, often from 40 a week to 34, 30 or even fewer, jeopardizing some workers' health benefits...

The association says it has nearly 200 current and former Wal-Mart workers and is growing by 30 workers a week. Members pay dues of $5 a month. In Florida, its membership includes workers from 30 stores in the Tampa, Orlando and St. Petersburg areas, and it is also seeking to enlist Wal-Mart employees in Texas.

We'll see how far the idea goes, but this seems like it could be the start of something big.

Given the low current rates of private-sector unionization, there are without a doubt a lot of workers with strong pro-labour leanings who lack a natural connection point to the labour movement. It isn't difficult to anticipate a wide variety of service workers being eager to join in an effort which has a plausible chance of improving their lot.

For now, it's very early going. The focus is naturally on the one business with the widest social impact (not to mention the one most noted for labour concerns). And the number of people involved for now is far from imposing.

But the small start should be primarily a way to build the profile of the movement, not a limitation on how far it can go. With a lot of hard work and some good luck, worker's associations could conceivably a labour connector along much the same lines that unions were a few decades ago - but with a less centralized, more diverse structure that's less prone to splits and in-fighting. And that's the type of force that the North American political scene sorely needs.

Making a difference

Not many people could possibly give up a Supreme Court seat for a job presenting a greater opportunity to change the lives of many people. But Louise Arbour did just that, and her efforts are paying off:
Ms. Arbour met this week with the president of China's supreme court, cabinet ministers and several activist groups and signed an agreement to help China enact legal reforms that would pave the way for its ratification of the International Covenant on Civil and Political Rights.

The article (quite rightly) points out that there are a lot of serious human-rights problems in China which Arbour is also trying to call attention to. But the positive here shouldn't go unnoticed: one of the world's most severe human-rights violators is on the verge of agreeing to international standards. It's a small step, but a necessary one.

Minor issues and diversionary tactics

More news from that other violent and chaotic disaster area, as ongoing constitutional discussions in Iraq are "fine-tuning" the current document:
Iraq's Arab neighbours also have been unsettled by language in the draft identifying Iraq as an Islamic - not Arab - country. Arab League diplomats said they were concerned about language that would appear to weaken Iraq's ties to the Arab world...

"(P)robably some words will be changed here and there, and this issue is under discussion, especially the Iraqi identity," Kurdish negotiator Mahmoud Othman said. "We are discussing this article aiming at achieving an aspiration of the Arab League as well as to satisfy some parties."...

To the Sunnis, however, the biggest obstacle was the article paving the way for creation of federated states, the chief demand of the Kurds to protect their 14-year-old self-ruled area in the north.

So all that's left to be worked out are Iraq's national identity and its system of government. To people grounded in reality, disagreements on such core issues would indicate some serious differences of position leading to a need for a lot more negotiations to come. Unfortunately, for Iraq's puppet government, they're considered "minor issues", since adherence to timelines is apparently a lot more important than actually having a workable constitution.

Meanwhile, the article also points out that Saddam Hussein's trial is scheduled to start just after the constitutional vote. Supposedly the reason is to try to avoid polarization before the vote, but on that score there was no reason for the trial to start as soon as it will.

More likely the trial is simply a diversion. Even if the country descends even further into the abyss after the vote (as seems likely regardless of the outcome), Bushco will then start ranting ad nauseum about how Saddam's trial is the great accomplishment which justifies the invasion. Because in Bush's world, it's better to put thousands of innocent people to death than to let one guilty man go free.

Cutting back

It's a shame that it's taken a natural disaster for the issue of energy conservation to be pressed publicly, but now everybody's in on the act due to Katrina:
"As a major energy producer, Canada has the ability, and the obligation, to be a part of this important effort," Natural Resources Minister John Efford said in a release.

"Canadians are asked to exercise judgment in reducing the use of oil and gas at this time."...

The Canadian Association of Petroleum Producers, which speaks for all of Canada's major oil and gas producers, said tight supply in hurricane Katrina's wake should be a "call to action for conservation."

Granted that the result for the moment is good, but this shouldn't merely be a momentary response. Hopefully it'll instead be an opportunity for people to learn some good habits which can carry over long after the U.S.' refining capacity is back to normal.

Centennial Celebration

The list of events is here. Take a look, and take the time to celebrate Saskatchewan this weekend.

Stability, respect and good work

For all the talk of societal economic stability, there's a huge difference between an economy that's doing well in numbers, and one in which individual employees actually have any stability for themselves. The Globe's Web comment features an excellent discussion on point:
Since the 1980s, many Canadian employers have responded to economic competition by shedding permanent full-time employees and replacing them with temporary employees on short-term contracts. Many companies have increased their reliance on temporary employment agencies. Hospitals, manufacturers and even universities have become increasingly reliant on these temporary employees...

For most employees, control is not based on being able to choose when, where and even whether to work, but rather on being in an employment relationship that has some degree of permanency and has a system of joint determination of compensation and working conditions.

The reality for most temporary workers is that they do not know from week to week if they will be working, where they will be working, or at what rate of compensation. For young workers, this uncertainty makes it difficult to plan a future. For workers with families, it makes it difficult to arrange child care, participate fully in their children's lives or play a role in their communities. For all temporary workers, the need to remain flexible, should work become available on short notice, makes it difficult to make fixed commitments to family, friends and society.

Obviously, there's a serious problem with a labour system effectively designed to detach employees from society at large. And what's worse is that public-sector employers are buying in: surely a public broadcaster or health-care provider, with greater social obligations itself and at least somewhat less market pressures than other employers, should be expected to be leaders in taking the wider societal implications into account.

Another point worth mentioning from the above passage is the importance of "joint determination" of many aspects of workplace life. Even among employers which provide full-time work, there's all too often a condescending view that workers should view their jobs as a privilege and accept all terms in order to keep them - see e.g. Regina mayor Pat Fiacco's "sober up" comment to city workers (which likely prevented a contract from being approved). The wrong-headed position that employees can't reasonably present a differing (and sometimes, more accurate) view of the workplace leads only to irritation on both sides.

Of course, employees and unions should be willing to accept reasonable terms of employment when offered. But so too should employers recognize not only that stability can be as much a plus for them as for workers, but also that the best solutions to most workplace issues come from both sides respecting and listening to each other. At both the CBC and City of Regina, that seems to be sorely lacking.

Thursday, September 01, 2005

Commission Salesman

Dalton McGuinty is set to make his case for a review of equalization:
Ontario is stepping up pressure on Ottawa to review the way it calculates provincial transfer payments with a national commission to address what the province says is a fiscal gap.

Such a commission would be the first since 1937 to look at the fiscal arrangements between the provinces and the federal government. Ontario Premier Dalton McGuinty presses for the analysis in an op-ed piece scheduled to be published Friday in CanWest newspapers across the country.

"I believe passionately in Canada. I believe in federalism. But I am equally convinced that the fiscal arrangements designed to support it are terribly outmoded and in need of significant reform," McGuinty says in the article.

Amen to that. At the moment, one of the great problems with the current Liberal provincial-relations strategy has been its complete failure to compare priorities. The equalization side deals may be justifiable in principle, but there's been no principled reason for the way money has been tossed around except for the relative political bargaining power held by a given province. Needless to say, that's a problematic recipe for responsible spending - and while it appears that nobody's losing out in the short term, the long-term effect is a much weaker federal system.

That said, McGuinty seems to miss a very important point. While Ontario will surely claim it's facing an unfair fiscal gap, it's far too early to prejudge just what such a commission would decide. There's thus some risk for McGuinty in proposing the commission, as his province could "lose" as easily as it could "win" in the final analysis

For the country as a whole, on the other hand, a commission should have some hugely positive effects.

First, it should shut down the side-deal structure as long as the commission is in progress. From a provincial standpoint, there'll be little incentive to put resources toward demanding a temporary fix rather than putting forward the best possible case on a permanent program. Meanwhile, the federal government will get temporary political cover from any immediate demands that provinces do make.

Second, during the course of the commission it should provoke a sorely-needed public debate on the question of the purpose of equalization. I've mentioned before my position that the ultimate goal should be meaningful equality of opportunity from province to province, without guaranteed equal results. But the submissions should run the gamut from virtually no equalization to nearly total equalization, and that debate would be the most meaningful policy discussion this country has seen in recent memory, bringing back to the table questions of both the services which we expect from government in general, and the relative control that each level of government should hold over those services.

Finally, after all is said and done, there's the benefit of the end result - presumably a system that most Canadians are happier with, and that the rest can at least see was the production of a transparent process with the good of the country in mind. And if that means less of the current sniping, both between provinces and between levels of government, then maybe it'll be another 68 years before we need to go through the process again.

My main fear is that the commission would be too good an idea to be put into effect - that it would have the effect of moving issues above partisan lines which the Liberals see as holding the potential for partisan gain. But now that McGuinty is on board, it'll be awfully tough for Martin to outright dismiss the prospect. Kudos to McGuinty, and hopefully this worthwhile idea will soon become reality.

Worth a reminder

Does anybody think it's a coincidence that following the NDP budget deal, tuition increases are at their lowest level since the '70s?

Of course, credit goes to the provinces as well for making education more of a priority, both in adding funding and in regulating fees. And Calvert is leading the pack there:
(F)ees will remain virtually unchanged in Newfoundland and Labrador and Saskatchewan.

"For a couple of decades we have seen governments providing a diminishing portion of our operating costs ... and that's right across the country," said Peter MacKinnon, president of the University of Saskatchewan...

MacKinnon said the Saskatchewan government's support was such that his university was able to keep fees at last year's levels.

But more attention to the issue on the national stage, as well as the promise of added federal funding, has to be a huge part of the reason. To Jack and company, well done.

The threat at home

The Tyee reports on the all-too-common presence of PBDEs in our homes - and notes a stark contrast between the apparent threat and the lack of action:
In the late 1990s, scientists discovered that levels of PBDEs in people's bodies was skyrocketing, doubling every two to five years. Worse, testing on laboratory animals suggested that PBDEs can pose some of the same risks as their chemical cousins, the PCBs. As with PCBs, a single dose of PBDEs administered to a laboratory animal during a critical phase of early development can cause permanent aberrations in memory and behavior. "Background" levels of PCBs -- the levels to which someone could be exposed in a fairly ordinary diet in the 1970s and 1980s -- are known to impair the human immune system and reduce IQ, and some scientists worry that PBDEs may have some of the same effects...

Recent tests in Japan, Europe and North America have detected PBDEs in virtually everyone examined, as well as in fish, wildlife, foods and housedust. A February 2005 study, for example, found that Canadian foods were among the most contaminated in the world, with PBDE levels up to 1,000 times higher than those found in tests in European countries...

Fortunately, the most troublesome forms of PBDEs were removed from the North American marketplace last fall. But that doesn't mean that PBDE levels in people have halted their meteoric rise; crumbling foam furniture and other consumer products may continue to be a reservoir for contamination for decades...

So far, most of the political attention paid to PBDEs has focused on removing them from commerce. This is all well and good, but it fails to address the literally billions of pounds of PBDEs already sequestered in homes and workplaces.

While it may help to respond by dusting more often and replacing furniture with PBDE-free models, the article points out that there's a bigger issue in the reckless use of chemicals without proper testing.

This isn't to say that all chemicals should be avoided at all times. But the potential cost/benefit calculation needs to be far more rigorous than it seems to have been. In exchange for the ability to use polyurethane foam in furniture, we're left with a massive stockpile of indestructible, harmful material which was (according to the article) known to be a cousin to long-banned substances such as PCB and DDT. And it appears that Europe and Japan have managed to avoid much of the damage.

Part of the answer should lie in greater international consultation - every country shouldn't have to reinvent the wheel in trying to determine which substances are acceptable for use. But the foundational principle is simply one of risk awareness, whether the threat is as obvious as a hurricane or as subtle as housedust. And neither Canada nor the U.S. has much to brag about on that point.

Weapons of mass confusion

The U.S. claims it's too preoccupied by Katrina to take care of softwood lumber for now. Fair enough, as long as it's dealt with as soon as possible once the immediate emergency subsides. But is Katrina any particular reason to avoid accepting aid to the affected areas?
Planes are ready to load with food and medical supplies and a system called "DART" which can provide fresh water and medical supplies is standing by. Department of Homeland Security as well as other U.S. agencies were contacted by the Canadian government requesting permission to provide help. Despite this contact, Canada has not been allowed to fly supplies and personnel to the areas hit by Katrina...

Canadian agencies are saying that foreign aid is probably not being permitted into Louisiana and Mississippi because of "mass confusion" at the U.S. federal level in the wake of the storm.

Canada has since made concrete offers to help through DART, through the Prairie Farm Rehabilitation Administration, and possibly through other means. But the only Canadians already on their way are members of a provincial force from B.C., at the request of Louisiana's state government, as well as Ontario power workers who appear to have travelled on their own.

According to the what seems to be the most recent information, the U.S. federal government is still "assessing its needs". Shouldn't a country completely focused on minimizing and recovering from a disaster have at least some handle on its needs this long after the disaster strikes? And how many people who could be helped by foreign contributions are going to suffer as a result of the lack of organization?

Double standards

Deborah Bourque and Maude Barlow discuss how NAFTA has been interpreted in nonsensical ways, and always to the benefit of the U.S.:
Canada has lost two Chapter 11 cases, and paid to settle another. Mexico has also lost two. But the U.S. thus far has emerged unscathed. When panels interpret the provisions of Chapter 11 broadly, they seem to do this only in cases brought against Canada and Mexico.

In one case directed at the U.S., a panel ruled against a challenge by the Canadian funeral company Loewen even though the panel agreed that Loewen had been treated with "manifest injustice" by U.S. courts. Just this month, a panel ruled against Canadian investor Methanex's challenge to California's ban on a gasoline additive. It even awarded costs to the U.S. government that were 30 per cent higher than what the U.S. had sought...

Legal scholars had predicted that, if Methanex had won its case, American politicians would not have stood for this intrusion into U.S. sovereignty and Chapter 11 would have been finished.

As perhaps it should be anyway. But that could be something to discuss in a new session of Parliament.

There's more to some of the cases than the writers indicate (e.g. to my recollection in the MMT case the ban was actually on transportation of the chemical rather than use of the chemical itself), but the central point is absolutely right: a dispute resolution mechanism that was supposed to give Canada some recourse against the U.S. has done nothing but give American corporations a hammer to use against Canada.

Wednesday, August 31, 2005

Speaking of preventable tragedies...

For those still trying to claim with a straight face that privatizing parts of health care will somehow lead to lower costs and better coverage, Bob Herbert points out a fine example of what can happen when governments try to cover services at private-sector prices:
Thanks to Mr. Bredesen's leadership, Tennessee is dumping nearly 200,000 residents, some of them desperately ill, from TennCare, the state's Medicaid program. Cindy Mann, a research professor and executive director of the Center for Children and Families at Georgetown University's Health Policy Institute, concisely characterized the governor's efforts:

"What he's decided to do is save health care costs simply by not giving people health care."...

What is happening in Tennessee is profoundly cruel. The people being removed from the rolls - some of them disabled, some suffering from such serious illnesses as cancer and heart disease - are mostly working-poor individuals who cannot afford private insurance. They are being left with no coverage and in many instances are in a state of absolute panic.

And I doubt anybody will call in the National Guard or take up an international collection for the victims of the decision either.

Planning for the worst

Billmon writes on how a lack of foresight is responsible for most of the damage to New Orleans:
The real lesson of Katrina, though, is that the scenes we've been watching in New Orleans could be repeated in many other places in the decades ahead, if the worst-case scenarios generated by the global climate change models become realities.

It's easy, even for reasonable people, to disregard those scenarios. The worst case, after all, doesn't usually happen. But the flooding of New Orleans, like the destruction of Pompeii, is a graphic demonstration of the fact that sometimes the worst case (or something like it) does happen, especially if it is preceded by years of willful ignorance and blind self interest.

If the worst case for global climate change comes to pass, the environmental and economic losses will dwarf, many times over, the costs of Hurricane Katrina. They'll also reduce into insignificance the price tag on the Kyoto Treaty -- which itself may be too little, too late. If Shrub really thinks that doing something about climate change would "wreck the economy," he should spend some of his unused vacation time thinking about what just happened to New Orleans.

Go read. As tragic as is the loss of life caused by Katrina, it's doubly so for the fact that it was readily preventable.

On learning

The Tyee points out that North America's obsession with standardized testing is not only harmful in itself, but the exact opposite tactic from that being taken by its global competitors:
It seems that in North America we conduct more research on education, learning and brain development, and ignore more of it, than anywhere else in the world. This needs to change. Studies have proven time and time again that standardized testing is unable to measure things that truly determine success or failure in life. Ironically, North American school reform, like the Fraser Institute's rankings, or the American "No Child Left Behind" act, are trying to bring our children's standardized test scores up to the level of Asia's students, some of whom have famously set the bar with dazzling displays of mental computation that beat the speed of calculators. At the same time, booming Asian countries are trying to reform their education systems to encourage innovation, creativity, social responsibility, and the capacity to engage in creative solutions and problem solving- none of which can be measured by a standardized test.

The ultimate standardized test will be the question of which countries wind up doing better from the standpoint of employers. And there's no reason for them to choose the less creative workers out of a crop of similar test performers.

Still growing, for now

StatsCan's latest economic data is out, and Canada's economy is again growing faster than anticipated by economists. And the peripheral data sounds equally promising:
The Canadian economy grew at an annualized rate of 3.2% in the second quarter of the year, compared to 2.1% in the last quarter...

Growth in final domestic demand slowed to 0.7% in the second quarter, down from a very strong 1.5% jump in the first quarter. While the growth in final domestic demand was much stronger in the first quarter, much of it was satisfied through a surge in imports rather than domestic production, moderating the overall growth in GDP. The opposite was the case in the second quarter; even though final domestic demand slowed, a much greater share of this demand was satisfied through domestic production, resulting in an acceleration in GDP...

Personal expenditures grew 0.6% following a stellar performance in the first quarter. Strong demand for durable and semi-durable goods continued to drive output up in the retail trade (+1.1%) and wholesale trade sectors (+2.3%).

Some of the recent growth in personal expenditures has been spurred on by the growth in labour income. Labour income grew 1.5%, outpacing the growth of consumption for the first time since the fourth quarter of 2003.

In other words: Canadians are making more money than before, spending a good amount of it on Canadian-made goods, and also using more for purposes other than consumption (which would hopefully include added investment and paying down debt).

That's the good news. The bad news is that the Bank of Canada will predictably use the increased spending and general economic activity as added reason to put an end to the progress:
The report will reinforce the view that interest rates will rise next week. The Bank of Canada meets a week from today and is widely expected to raise rates for the first time in 11 months, by 25 basis points to 2.75 per cent, in an effort to keep inflation in check.

The moral of the story: make good use of any raises and opportunities while they're there, as once again your central bank is going out of its way to make sure they don't last for long.

Foreseeable dangers

If the stock market crashes in the next couple of months, Donald Coal will be able to say "I told you so" thanks to his list of five factors that could lead to a financial storm. Of particular interest is the most plausible threat:
Alan Greenspan is headed for retirement, and he wants to go out as the man who slew the speculative excesses that threaten the U.S. economy -- notably the housing bubble. In all past periods of sustained Fed tightening, long-term interest rates rose. Most importantly, the yield on the 10-year treasury note, which is the basis for home mortgage loan yields, always rose, and that cooled out -- or sometimes killed -- the housing market, along with other kinds of asset speculation. Not this time.

In what Greenspan calls "a conundrum," 10-year yields have actually fallen since he began raising the Fed funds rate from its surreal low level of one per cent to the current 3.5 per cent. In percentage terms, that's the most dramatic Fed tightening ever, but money is still loose, speculation is still robust, and house prices remain, as he puts it, "frothy" in at least some parts of the country. (Greenspan resists using the term "bubble," because he has never identified a bubble until after it burst, even Nasdaq at 5,000.)

When he was a private economist, Greenspan was known as a poor forecaster. Perhaps that record encourages him to proclaim the impossibility of identifying asset price excesses. Still, he keeps raising interest rates by .25 per cent at every meeting. The gap between his rate and the 10-year yield is now a relatively tiny .8 per cent, aiming toward almost zero by year-end. Flat or inverted yield curves (in which short-term interest rates are as high, or higher than, long-term rates) usually produce recessions. They even more usually produce stock market sell-offs.

Of course, there's no easy way out of the problem for Greenspan: while holding the Fed rate down would avoid the inverted yield curve, that would also help to encourage more spending and expand what Greenspan surely knows to be a housing bubble. Unfortunately, it was bad policy choices over the past four years that made the situation what it is now - and like it or not, Greenspan's legacy will likely be as the man who could (and should) have prevented both the reckless Bush tax cut and the current bubble. It seems the best he can do now is to try to shift some of the blame.

For the rest of us, meanwhile, now might be a great time to let some investments go on vacation.

Tuesday, August 30, 2005

More good commentary

Thomas Walkom writes on the death of NAFTA:
The death of NAFTA was confirmed this month when Washington refused — again — to obey a trade tribunal requiring it to let Canadian softwood lumber into the U.S. duty-free.

Yet the dying has been going on a long time. In some ways, it is as if NAFTA never lived.

Canada's federal government finds this hard to accept. The governing Liberals, once stoutly opposed to the Canada-U.S. free trade deals, now swear by them.

Prime Minister Paul Martin seems to think a light slap on the American wrist — say, punitive duties on California wines applied at some vaguely indeterminate time in the future — will pressure the U.S. into doing what Canada wants.

But the point is that the U.S. is not abiding by NAFTA rules because, in a fundamental way, it does not intend to — and never did.

Particularly useful is Walkom's historical perspective: businesses on Canadian soil have steadily demanded added integration with the the U.S. at any cost since before Canada was a country. There has been some subtle improvement in that this time out nobody's actively calling for annexation (to my knowledge), but for the most part the song remains the same.

Take a look.

I can't wait for the salute to show tunes

It's bad enough that the Cons seem to want to put Supreme Court nominees through a U.S.-style publicity wringer, but criticizing Cotler for inviting public input into the nomination seems way off base:
Some critics are dismissing it as nothing more than Canadian Idol for the legal set, as Justice Minister Irwin Cotler seeks public input into who should fill the next vacancy on Canada's Supreme Court.

The federal Justice Department issued a release today asking Canadians to submit suggestions for potential candidates to replace Justice John Major, who retires Dec. 25.

While I'm more than willing to be critical of Cotler when he deserves it, this strikes me as a solid balance to be struck in appointing a Supreme Court justice. Many different people and groups will get a voice in the selection, and in fact there are a couple of points where any overly partisan judges could be filtered out (not that that's an issue among the top candidates anyway), but ultimately a prime ministerial appointment carried out in good faith goes a long way toward avoiding a SCOTUS-style circus.

Of course, there are those who seem to think that the SCOTUS frenzy doesn't go far enough. In the article, Democracy Watch suggests giving each federal party a veto over any one candidate for the nomination. A brilliant suggestion, if one's goal is to force the government to horse-trade other policies in order to get the best candidate to the bench against a threatened veto. But the most I can say from a democracy perspective is that it'll provide for equal-opportunity mudslinging as parties slam each other's motives for using (or threatening to use, or not using) the veto.

Sadly, the article doesn't actually name anybody willing to go on record comparing a life appointment to the bench to Canadian Idol. Anybody with a better idea of the source of the reference, please post a comment.

Cause and effect

This should come as little surprise:
The U.S. poverty rate rose to 12.7 per cent of the population last year, the fourth consecutive annual increase, the Census Bureau said Tuesday...

The last decline in overall poverty was in 2000, when 31.1 million people lived under the threshold — 11.3 per cent of the population...

Sheldon Danziger, co-director of the National Poverty Center at the University of Michigan, said the poverty number is still much better than the 80s and early 90s.

“The good news is that poverty is a lot lower than it was in 1993, but we went through a hell of an economic boom,” Mr. Danziger said. “Nobody is predicting we're going to go through another economic boom like that.”

I'm not sure there could be a more obvious connection between political leadership and the poverty rate. But even for Bushco, this is an impressive feat. Based on a rough calculation (1.4% of 300 million people), this means 4.2 million more people in poverty than there would have been under the poverty rate at the start of Bush's tenure. Compassionate conservatism indeed.

We'll see now how many employees of the Census Bureau join the sub-poverty-line group for having the gall to release the facts.

No hard evidence of competence

More insanity from the Arar inquiry. The diplomat who met with Maher Arar in Syria concluded that there was no "hard evidence of torture", even though he didn't actually have any training as to what hard evidence might be:
It was clear from Arar's body language that he didn't feel free to speak on certain subjects, said Martel.

It also appeared the Syrians had been holding Arar in jail for longer than they had previously admitted.

Martel insisted repeatedly that he saw no visible signs of torture. But he admitted he had no specialized training in how to detect warning signals of physical or psychological mistreatment.

The testimony raises a couple of issues. First, shouldn't diplomats who might be expected to have to deal with a situation such as Arar's receive training that would allow them to fully evaluate the behaviour of a detainee? Maybe it's only obvious in hindsight, but as far as I can tell an office charged with upholding the interests of Canadians abroad should be well aware of the risk posed by states with a history of violating human rights.

And second, the question underlying the entire inquiry: what exactly was Canada's standard for taking meaningful action? It appears that many officials at least had substantial concerns about Arar's treatment, and the main justification for doing nothing was a lack of information as to what as going on. Under those circumstances, why wouldn't Canada have demanded at least the opportunity to speak with Arar without supervision?

At the very least, thanks to the inquiry we should have some answers as to what went wrong. But these should be open questions for the future as well, lest more Canadians become collateral damage in the war on terror while their government sits idly by.

Edit: Note also this Globe and Mail piece, as Cotler tries to have it both ways on torture. Though I suppose if one squints hard enough, Cotler's may not be an entirely contradictory position: torture is indefensible, ergo Cotler will refuse to comment when it happens rather than trying to defend it.

Adding to the confusion

As if softwood lumber wasn't enough of a mess, now the U.S.' 2004 trade ruling upholding the existing tariffs is being upheld by the WTO:
The WTO panel ruled yesterday that the United States adhered to international law when it issued a revised finding in late 2004 that Canadian softwood lumber imports threatened its mills, said a U.S. trade official, speaking on the condition of anonymity.

The confidential ruling, confirmed by Canadian officials, further complicates an already tangled web of legal decisions in the long-running trade feud.

Not that this accomplishes anything in terms of ending the matter: it gives the U.S. more bargaining power in negotiations, but it looks like we're well past that point anyway. It's only an interim ruling, even if it is expected to be upheld later. And while I'm not sure exactly how the WTO and NAFTA rules interrelate, I'd have to presume that compliance with one set of rules doesn't justify violation of the other.

Even assuming that the WTO finding will definitely give justification to the U.S.' 2004 trade ruling, the U.S. has gone out of its way to point out the difference between its 2002 and 2004 rulings. Now it's Canada's turn to draw the distinction: a valid ruling in 2004 couldn't possibly have justified tariffs in 2002-2003, so Canada should still have a claim to all money collected in that time.

It's a good thing we have all these international agreements to bring predictability and logic to trade, isn't it?

Monday, August 29, 2005

What I did on summer vacation

The NDP wants Parliament to reconvene and take action on softwood lumber. The Libs are open to the idea. But one party's not done with the barbecue circuit just yet:
We have no plans for early return,” Mr. Harper's acting communications director William Stairs said Monday, dismissing an idea first floated by NDP Leader Jack Layton...

Mr. Stairs said if the New Democrats wanted to see progress on the issue of U.S. duties on construction-grade wood, they'd agree with the Conservatives and pressure Prime Minister Paul Martin to call U.S. President George W. Bush.

Mr. Stairs said the Tories have been urging Mr. Martin to talk to Mr. Bush for weeks to resolve things at the highest political level but he has refused to pick up the phone.

Just in case there's any doubt, I'll agree that Martin should have been on the phone to Bush long ago. But that's no excuse for the rest of Canada's MPs to shy away from representing their constituents as best possible. Not to mention that a session of Parliament would put Martin on the hook in question period every single day he refused to make the call.

Apparently the Cons still haven't figured out how best to apply pressure to the PM. Which may be why the party with a fifth as many seats had five times as much effect on the budget. No wonder the Cons want more time to get their act together before meeting their rivals face-to-face again.

Now that's an NDP issue

This year's poll numbers on bank mergers are out, and Layton has to like what he sees:
The Environics Research Group survey found that 56 per cent of Canadians polled said they thought bank mergers weren't in the public interest - almost double the 32 per cent that said such deals would be good for the country.

Fully 36 per cent said their dislike of bank mergers was "very strong" or "strong" - more than double the 17 per cent that said they felt "strong" support for permitting such business deals.

That opposition softened only if Ottawa set strong conditions before approving mergers.

Those might include a federal demand that merging banks must guarantee no branches would be closed in small towns and rural areas. Or Ottawa could encourage greater competition from credit unions and small banks.

Similar conditions have been suggested by some opposition MPs, with little response from the federal Liberals, said NDP finance critic Judy Wasylycia-Leis.

The interesting part to me is just how obvious it is that the Liberals are trying to take a side even while refusing to pursue it - can it be an accident that the poll was carried out in January, but is just now becoming public under a Freedom of Information request? Fortunately, it's public now...and it's obvious that the NDP is squarely in line with public opinion on the issue. The key now is to make sure that the issue stays in the public eye as an added reason not to give the Libs a majority this winter.

On interrelatedness

Ian McKay has an interesting piece at Rabble on the essence of leftism:
Do what is possible, one issue at a time? Of course — there's no realistic alternative. But you will most likely soon reach conclusions about the patterns of opposition and support that shape each and every one of these issues and connect them together. You may well decide that the persistent general reactions behind that specific pattern also need to be understood and changed. You will start to see not just a random pattern of problems, but a system underlying them.

Every leftist, at some level, believes and acts on this insight: there are ways of explaining not just the individual problems but the connections between them. Once grasped in thought, these connections have to be transformed in reality. To tackle even one problem — eliminating HIV/AIDS, preventing global environmental meltdown — means struggling to puzzle out why that problem arose in the first place. As soon as you start pursuing the process of figuring each problem out, and connecting it with other problems, you have started down the road to leftism.

I'm not sure that I'd agree with all the implications of the piece - surely it's possible to have a reasoned, unified right-wing (or centrist) view of the world based on different founding assumptions, and it's obvious that many right-wingers use very similar language to McKay's in justifying some of their policies.

That said, I naturally agree with McKay that the leftist view is the more plausible of the options once one takes a look at the bigger picture. Give it a read.

(Edit: typo.)

A taxing effort

Earlier, I mentioned that I'd try to wade into the question of what policies the NDP should be pursuing in its next election platform. I'll start today with an area that the party generally stays away from, namely that of tax policy.

The current tax policy is found at p. 60-61 of Platform 2004. There are some great ideas there: full indexing, removing the GST from essentials, increasing the child tax benefit, imposing an inheritance tax, closing loopholes and refusing tax treaties with tax havens.

While I like these ideas, some of the other included elements are plainly in the wrong part of the platform, including imposing proper environmental fines on corporations and removing the tax-deductible status of those fines. Especially with the next election due to occur just after the Gomery report, there's going to be a heavy emphasis on accountability, both in government and elsewhere. These proposals should be defined and pressed as an issue of corporate accountability, not placed where they can be seen as an unfounded tax grab.

More fundamentally, the current tax platform seems to dance around the edges of the taxation system more than it demands substantive change. In my view, that's a mistake. Taxes are an inherently unpopular necessity in government, and there's much political hay to be made by validating popular frustration on this point. By defending the status quo in any significant part, the NDP ends up on the wrong side of the frustration.

There's no reason for that to be the case. Instead, the NDP should leave the Liberals to try to defend all the iniquities and complexities in the current tax system, and put forward a proposal for an overhaul and simplification of the federal tax system.

The first step should be a clause-by-clause analysis of the Income Tax Act, scrapping any deduction that doesn't have a demonstrable positive effect. This scrutiny has already been applied to social programs as part of the '90s budget cuts; why shouldn't it apply to tax breaks as well?

After that analysis is applied, tax rates should be set so as to remain roughly revenue-neutral, but with a slightly more progressive slant. The end result will be a lot of people not only paying less taxes, but also having to put in less effort to do so (since the Act will then be simpler to apply). The tradeoff will be relatively slight increases at the top end, as well as an end to pointless deductions.

Alongside that theme, all of the ideas included in the 2004 platform can then become part of the reform package. In particular, concepts such as closing loopholes and imposing an inheritance tax should seem a lot more palatable when the NDP can put forward concrete examples of how most people will see reduced taxes.

I understand that some voters might cringe when the words "NDP" and "tax" are put together - and I'm sure that's a large part of the reason why tax policy was buried in page 60 of the platform. But in order to ever present itself as a future government, the NDP has to tackle that problem head-on, and there may not be a better time for it. With Bush's call for U.S. tax reform, the issue is already somewhat in the public eye, and the Cons will surely make their usual call for a flatter tax structure.

In that context, somebody needs to point out that tax reform doesn't need to involve giveaways to the top end. No other Canadian party can plausibly combine a reform position on taxes with a progressive one; the combination should be a winner for the NDP.

See you in court

For those hoping to see Canada take the issue of softwood lumber to court in the U.S., you've got your wish:
In a lawsuit filed in New York with the U.S. International Trade Court, Ottawa and the Canadian softwood lumber industry are demanding that ''tens of millions of dollars'' in import duties already funnelled to U.S. industries be handed back immediately.

That could easily soar to more than $5-billion in duties collected from Canadian lumber producers being illegally handed over to the U.S. softwood lumber industry in coming years, the Canadian complaint said...

The Canadian lawsuit says that even under American law, the so-called Byrd Amendment -- which diverts punitive import duties from foreign importers to allegedly suffering American industries -- does not apply to Canadian industries because of NAFTA.

There's some merit to the move, though it's not apparent why it would just be starting now; there's no reason why this particular suit couldn't have been launched from the moment money was handed over under the Byrd Amendment.

That said, there may be some downside to this now, both in opportunity cost and in the risk of a negative decision.

On opportunity cost, the article rightly suggests that we won't know for quite some time how long the case would take to get before a judge. But it's easy to guess that it would take at least months, and perhaps years if the U.S. decides to obstruct the process. This may thus be another chance for the U.S. to defer its obligations without immediate consequence.

On the merits, an American court will naturally be expected to see the issue on the terms most favourable to the United States. While courts in most countries would be very likely to recognize the supremacy of international agreements, that may not be so in the U.S., where Republicans have been threatening to impeach judges for applying international law, and where Bushco has been going around for years arguing that current presidential decrees trump the U.S. Constitution. In that environment, can we be the least bit confident that the decision to ratify NAFTA will be given precedence over more recent protectionism?

So, the process will be long (if nothing else, long enough to push it past the next Canadian election to make it seem that the Liberals are taking meaningful action), and it may give the U.S. another domestic precedent to wield against the NAFTA and WTO tribunals.

With that in mind, the real merit in launching the suit is purely symbolic - it's Martin's way of taking some action alongside the heated words of the last week. Which is well enough as a signal, but there's a lot more yet that needs to be done.

Points worth considering

I doubt that the view of Canada's nurses will get as much attention as that of the CMA when it comes to the health care debate. But judging from the Globe's web comment, we'd do well to listen to the Canadian Nurses Association:
The option to allow more private care as a solution to problems in the health system may, at first, seem tempting. But it is a penny-wise, pound-foolish and short-sighted decision that flies in the face of evidence. Waiting times for diagnostic and surgical procedures, often the impetus for debate on the system, represent only a tiny part of what a comprehensive, responsive health system needs to be...

We can no longer tolerate short-sighted decisions that are based on the opinion polls of today, with no vision for tomorrow. It is difficult to transform our disease-focused, medical-care system to a health system focused on prevention and wellness while also meeting the need of providing curative care for our fellow Canadians. But the struggle cannot be overcome until all the parties involved are willing to look honestly at the reasons for the problems we face and not opt for facile and potentially destructive solutions such as privatization.

Agreed on all points, in particular the need for a greater focus on prevention which will reduce treatment costs in the long run. But we'll need to win the debate on public control of the system before we can start planning how best to apply that control.

Sunday, August 28, 2005

Punishing the Whistleblower

I haven't seen much elsewhere on it, but this should be relatively big news as a prime example of Bushco in action:
A high-level contracting official who has been a vocal critic of the Pentagon's decision to give Halliburton Co. a multibillion-dollar, no-bid contract for work in Iraq, was removed from her job by the Army Corps of Engineers, effective Saturday.

Lt. Gen. Carl A. Strock, commander of the Army Corps, told Bunnatine H. Greenhouse last month that she was being removed from the senior executive service, the top rank of civilian government employees, because of poor performance reviews. Greenhouse's attorney, Michael D. Kohn, appealed the decision Friday in a letter to Defense Secretary Donald H. Rumsfeld, saying it broke an earlier commitment to suspend the demotion until a "sufficient record" was available to address her allegations.

The Army said last October that it would refer her complaints to the Defense Department's inspector general. The failure to abide by the agreement and the circumstances of the removal "are the hallmark of illegal retaliation," Kohn wrote to Rumsfeld. He said the review Strock cited to justify his action "was conducted by the very subjects" of Greenhouse's allegations, including the general.

The above paragraphs summarize the story pretty well, but even they underestimate the injustice of Greenhouse's dismissal. Later on, the WaPo article says the following of Greenhouse's work record:
Greenhouse has developed a reputation among those in both government and industry as being a stickler for the rules. To her critics, she's a foot-dragging, inflexible bureaucrat. To her supporters, she's been a staunch defender of the taxpayers' dime.

The striking question to me is this: what better quality could there be in a contracting official than an insistence on making sure that transactions are properly conducted? Nothing in the article indicates that there was any problem with Greenhouse aside from an unwillingness to lend her approval to questionable contracts. That's exactly the kind of employee who can help to prevent and root out corruption. But apparently such skills are considered a negative at the moment.

Only in the Bush administration could following the rules be grounds for dismissal. We can only hope that an organization with a higher ethical standard will recognize Greenhouse's skills...and that there won't be too much more harm done now that Bushco has made itself even less accountable.

Monitoring the premises

Now this is the kind of military investment that's actually worthwhile:
The Canadian Space Agency is buying $400-million worth of Arctic imagery from Richmond, B.C.-based MacDonald Dettwiler Associates, which owns the soon-to-be-launched Radarsat 2 polar orbiter.

The satellite, scheduled to be airborne next summer, is expected to operate over a seven-year lifespan, said navy Lt.-Cmdr. Robert Quinn, project director.

The federal investment is less than the cost of a new icebreaker — and the satellite can see in all weather, day or night, 365 days a year, Defence officials say.

There's a long way to go in actually defending the Arctic. In addition to putting a lot more effort into the manpower and equipment to enforce our sovereignty, the longer-term plan should include launching Canada's own satellites rather than relying on private-sector observation.

But it'll take time to determine the best possible means to do so, and in the meantime this deal is a significant step in the right direction.

Taking charge

Layton isn't quite calling any shots yet - but his saying "jump" on softwood lumber at least has Martin considering Layton's plans:
"While the government does not believe that the recall of Parliament is warranted at this time, it believes that we cannot exclude such a possibility between now and the scheduled resumption" (said Martin spokesman Marc Roy).

The comment came after NDP Leader Jack Layton publicly appealed to Martin to reconvene the House of Commons immediately to deal with the latest developments in the long-simmering softwood dispute.

Layton, in an interview from Burnaby, B.C., said that getting the Commons back in session would "send a clear signal to the United States that Canadians regard this as a very serious matter."

It would also put pressure on Martin to come up with a comprehensive strategy for dealing with the affair, said the New Democrat leader.

It'll be particularly interesting to see whether any prominent Liberals also take Layton's side on the question of whether export tariffs on oil are justified as a response. In any event, Jack's position plainly has the ear of both the public and the PM - the question now is whether it'll lead to government action.

Consumer response

The CP covers some consumer responses to higher gas prices. The sad part is that it took a huge rise in gas prices to move people toward such common-sense measures as buying more efficient cars:
"I went home and figured out exactly how much (a Chevrolet Avalanche) was going to cost every week in gas and it did not make sense," Schwingenschloegl said.

So he returned the shiny new truck to the dealer and bought a Mazda 3 compact car...

Schwingenschloegl, who estimated he drives up to 50,000 kilometres a year, said he'll spend half of what he would have on gas than if he kept the truck.

Or taking the time to arrange a car pool:
Steven Schoeffler, who operates the carpool website, said with the recent spike in gas prices he has seen record increases in the number of new listings on his page with 69 new listings in a single day, nearly double the previous record.

Now if people kept up with these sorts of ideas at all times, gas prices would probably be a lot lower to begin with.

Unfortunately, the article doesn't provide much reason for optimism, as the purchaser of the more efficient car points out that he plans to get another truck just as soon as gas prices go down. All too likely, it'll take a long-term increase in gas prices to have a similar effect on consumer behaviour.