Race to the Right 2009

Nothing is quite as satisfying politically as watching your opponents go through a leadership fight. The Ontario PC's are now engaged in a leadership contest. A quick run through of the candidates declared and otherwise.

Tim Hudak, MPP for Niagara West-Glanbrook: One of the youngest members of the Common Sense Revolution, Hudak has legislative experience having been elected in 1995. He also has cabinet experience though not exactly in high profile ministries. Most importantly, Hudak is reported to have the support of former Premier Mike Harris and other high ranking Tories. Expect CSR part 2 from Hudak. He has not officially declared but it would be a shocker if he doesn't soon. Assuming he's in, his challenge will be attracting enough second ballot support to avoid being yet another losing frontrunner See: Tabuns, Peter (2009); Clinton, Hillary (2008), Ignatieff, Michael (2006); Kennedy, Gerard (1996) etc.

Christine Elliot, MPP for Whitby-Oshawa: Elliot is a bit of a tabula rasa politically. She is most often defined by her marriage to Jim Flaherty. Elliot may not be as radical as her husband (she supports gay marriage, for instance) but certainly wouldn't be viewed as a voice of the progressive wing of the PC's. The optics may be wrong for Elliot. How does an Ontario premier complain about the fiscal straight-jacket being imposed on the province by Ottawa when her husband is the federal finance minister? Ms. Elliot should be judged on her merits, the question is whether that is possible. There is no guarantee Elliot runs. I'd put the odds at around 60% she runs.

Frank Klees, MPP for Newmarket-Aurora: Yes, the other guy from the 2004 leadership race is back. Klees should not be discounted entirely. He won 22% of the vote last time around and has arguably the longest resume in the race. Long resumes, however, are not guarantees of success in politics just ask Bill Richardson. He has the backing of the politically active Rev. Charles McVety so that may be a hint as to where his support base is. Klees has declared his candidacy.

Randy Hillier, MPP for Lanark-Frontenac-Lennox and Addington: Because no leadership race is interesting without the radical quirky candidate, we have Randy Hillier. Yes, the man who once sent a dead animal to a provincial cabinet minister and has been arrested for his radical farmers' protests is running to be premier. Mr. Hillier undoubtedly has a constituency. However, the PC's rules don't favour a rural based candidate. There simply aren't enough rural ridings for Mr. Hillier to be successful in a weighted one-member-one-vote system. Mr. Hillier has also officially declared his candidacy.

Masood Kahn: Even if Mr. Kahn was a serious candidate for this job, he'd be doomed by circumstance. The Tories are not going to elect anyone who does not currently have a seat in the legislature. However, he is in the race, so I guess this might be a Martha Hall-Findlay like attempt to raise his profile. In which case, all the power to him. He's in, so we should learn a bit more about him in the coming weeks. Then again maybe not... anyone got a bio on Gilles Bisson?

In Perfect Harmony

Just wanted to say a few words about Premier McGuinty's plans to harmonize the PST and GST in the province of Ontario. This is something that has been a long time coming. If you talk to small business owners and frankly, large business owners in this province they will tell you that this is something that will ease the bureaucratic burden. This was a burden imposed on the province by Brian Mulroney and now thanks to Dalton McGuinty it has at least been partially lifted. I understand that this will not be cheap for Ontarians. It is a tax grab. However, there aren't a lot of tax grabs that help foster a better environment for business in Ontario. This does. The province is in trouble and needs any extra income it can get. Businesses need reasons to stay open; they need a reason to keep trying in this economic climate. This can't hurt. Dalton McGuinty can be called a lot of things, cowardly isn't one of them. This is a man of great political courage and he should applauded for doing the right thing, even if it isn't the most popular thing today.

BC-STV: It Depends Where You Live

One of the more perplexing things about BC-STV, the proposed electoral system on the ballot in the upcoming BC provincial election, is that it changes depending on where you live. Most people in the province would find themselves in an electoral district represented by four or five members. However, there is significant deviation from this median. For instance, the BC Electoral Boundaries Commission or BC-EBC (starting to look like alphabet soup?) has proposed that in order to avoid an overly large electoral district in Northern British Columbia that the districts for Northeast and Northwest BC be limited to just two members. The people of Victoria and environs will have, by contrast, seven representatives. What is the difference? Quite a bit actually.

First of all, it severely limits the chance that anyone except for the Liberals and NDP would get elected in these electoral districts. Why? Because in order to get elected in the new Northern electoral district of Peace River you would require 1/3 of the vote plus 1. By contrast in Victoria you would only require 1/8 of the vote plus one. With a high threshold, the riding will be a difficult target for smaller parties. If the Greens were polling at 15% province wide, they would be wise not to waster their time in the north. The high threshold in these two member ridings would threaten to lock the ridings into a permanent state of 1 NDP MLA and one Liberal MLA with neither party able to get the requisite 2/3 of the vote to dislodge the opposing member. This predictable scenario could lead to the ultimate disaster for the people of Northern British Columbia: politicians stop having to listen to their concerns. If you are a strategist designing a platform for either major party you would be unlikely to put anything in to court northern voters, as there is no plausible reward and a high chance that there would be no punishment for the omission. The only competition would be within the party to determine which candidate gets on the ballot.

More technically, a vote is counted differently depending on how many members need to be elected. The transfering of votes which is the hallmark of STV happens more often depending on the number of candidates and the number of seats available. If there's only two seats, which in turn would drive down the number of major party candidates on the ballot (assuming the parties are strategic in the number of candidates they run in each district: a fairly safe assumption), thus inevitably driving down the number of transfers. Advocates of STV view the transfers as a way of understanding voter intent on a deeper level. If you don't have as many transfers, you have a more shallow interpretation of voter intent.

Canadian geography is always going to be an argument against a system which elects multiple members per electoral district. In the case of BC-STV, as currently proposed, the lack of density in Northern British Columbia would fundamentally make the electoral system different in the North than in the more populous south. The question is whether or not British Columbians are comfortable having different electoral systems depending on where they live.

Earth Hour 2: This Time It's Electoral

Earth Hour is back. This time they've eliminated most of the pretext of this actually being good for the planet (and thank God for that). This time it's just a massive demonstration ahead of the Global Climate Change Conference in Copenhagen later in the year. The organizers are calling it a global election between the earth and climate change. Turn off your lights or the polar bear gets it! Yay for ridiculously false dichotomies! In all seriousness, the time to lobby governments about this is long past. No amount of darkness is going to make governments more willing to put domestic industry at risk in Copenhagen. People might care about climate change but they care about their job more. As long as there is a connection between going green and decreased industrial output in the minds of governments from Washington to Moscow to Beijing, we will not see real progress on climate change. The challenge in Copenhagen as it was in Kyoto and Bali before, will be reconciling the need for cheap electricity to fuel economic growth in places like China and India. This and the linked chicken-egg problem of the US only willing to reduce its emissions if the manufacturers of Asia are similarly bound and the Asian manufacturers unwilling to bind themselves to any agreement to reduce emissions until their CO2 per capita is equal to the West is what will challenge negotiators at Copenhagen. No amount of sitting in the dark will make these challenges any easier. Like so many other causes célèbres, it is easy for people to shout "Do Something About Climate Change!" Sorting out geopolitical intricacies, scientific challenges and economic dilemmas is a little more difficult. Earth Hour will yield nothing but anger, disappointment, and, inexorably, another Earth Hour twelve months hence.

Flintstones? Don't Insult Fred and Wilma

Gary Goodyear should resign. It isn't that someone who doesn't believe in evolution can't serve in government, he just shouldn't responsible for scientific funding. I wouldn't want a religiously motivated pacifist at the Ministry of National Defence either. That said, can we stop the Flintstones jokes and start taking this news story seriously. See when I heard this story, I immediately went to this:




Remember how we all laughed at the silly ignorant Americans? Laughed a little too soon.

Theocratic Democracy: An Oxymoron in Our Time

Iran's politics fascinate me. It might just be that I don't really understand how the system works and it is therefore interesting in its mystery. More likely, I think it's the apparent contradiction between the Governing Council of religious rulers and relatively democratic presidential elections (once the candidates are pre-screened). What kind of theocracy has term-limits? It's also of critical importance to the peace of the planet that current President Mahmoud Ahmadinejad is defeated and replaced by a more moderate, reform-minded leader. So, the withdrawal of former President Khatami in favour of another reform-minded candidate adds a new wrinkle to this story. Although it may be within a narrow range, there is a decision left to the people of Iran. I watch with interest and hope that they choose a candidate of peace.

Cramer v. Stewart

A few words on what I think will be the interview of the week if not the month. For those of you out of the loop, Jim Cramer of CNBC's Mad Money was the guest on Jon Stewart's The Daily Show with Jon Stewart after a week of squabbling back and forth. Stewart was at his best and worst last night. His worst because he barely let Cramer speak, letting his emotions overwhelm his skills as an interviewer. His best because it was reminiscent of the oft replayed Crossfire episode where Stewart took Tucker Carlson and to a lesser extent Paul Begala to task for their coverage of politics. Stewart seemed to channel the anger of a nation and let Jim Cramer stand in for America's financial industry. Cramer acted like a diplomat in a hostile capital: quiet and conciliatory. There was none of Cramer's trademark energy, anger and humour. Stewart ambushed Cramer with video of the former hedgefund manager explaining how to artificially lower a stock's share price without getting caught. Cramer could only watch uncomfortably and apologize. Cramer's attempts to defend himself and his network seemed half-hearted. His only real argument seemed to be that Wall Street executives had lied during their interviews on CNBC. Stewart was having none of it.

In the 1930's, bank robbers gained the status of cult heroes as people found solace in the damage done to the banks which had wrought such havoc in their lives. Stewart struck a similar populous chord last night. He was uncompromisingly angry. He was ruthless. When he said "we" when talking about the American people, he did not risk much dissent from Main Street. There will be those who will be like Tucker Carlson was in the middle of Stewart's Crossfire interview when he grumbled "I thought you were supposed to be funny." However, his fans will be content. Stewart is popular not just because he's funny but because he's funny and in touch with the frustrations that modern America has with itself. Cramer will not like Carlson fade to black. I think both Cramer and Stewart realized the potential for this feud. Mad Money and The Daily Show do not have a huge overlap in audience. I think they probably both gained fans this week from the cross-pollenization. Cramer looked like he was taking his medicine last night and it may prove to have been good for him.

A Bad Clip is a Dangerous Thing

Some quick thoughts about quoting out of context. First, stateside Jon Stewart has started a war with CNBC over their coverage of the economy. Stewart is right in his criticism that CNBC cheerled the housing bubble all the way up and did next to no investigative journalism into its potential consequences. Did he need to take Jim Cramer out of context when he was talking about the safety of money invested with Bear Stearns as opposed to money invested in their stock? No. Likewise, this vid slamming Harper on the economy takes the PM out of context for no reason. Harper was actually right in his statement that the Canadian HOUSING MARKET is in a cyclical downturn but does not require major government intervention (I don't consider the collateral damage insurance to the banks as major intervention). I mean seriously, the interview Harper did with Amanda Lang during the election is gold (that's the "buying opportunity" one). Why do you need to misquote an interview where he actually sounded intelligent?

Congratulations Rick Johnson!

We have a new MPP for Haliburton-Kawartha Lakes-Brock and it isn't John Tory. I guess this proves the old adage: if at first you don't succeed; fail, fail, fail again.

The Rock and The Hard Place

I'm not an economist. I have studied a bit about economic crises and their political responses, but I'm by no means an expert. However, I think what we need today is a better sense of the consequences of the actions being proposed to deal with the economic crisis. This isn't a Glen Beck what if the worst case happens thing, it's more of a why is everybody saying "do it my way or else" thing. So in what is probably in oversimplified, layman's explanation, what exactly are people so scared about.

The Rock: The rock here isn't Newfoundland, it's Japan. Specifically the economy of Japan for the last twenty years. In the late 1980's the Japanese economy was overwhelmed by a series of bank failures. The Japanese government responded with piecemeal bailouts and the maintenance of a zero percent interest rate. The result was banks that were too weak and risk averse to lend but not weak enough to fail and be put out of their misery. The term zombie banks is used because they were essentially half-dead. It can fairly easily be argued that Japan never really recovered from that shock. The Nikkei certainly hasn't. GDP growth has been slow when it's grown at all. In the late 90's economists called it the lost decade, it's now more like a lost score (in the Lincolnesque use of the word). The similarities to today are striking and worrying.

The rock is what we know. It is the go to scare tactic for those on the ideological right. It's proof, if one case can be a proof, that simply throwing money at a problem doesn't make it go away.

Quick side note: The response of some on the left, that there is a similar success story in Sweden is not all its cracked up to be. The Swedish economy which was bulldozed in the early 90;'s recovered but whether that was because Sweden took over banks or because Sweden liberalized labour and trade laws in the early 90's culminating in their accession into the EU, is highly debatable. They both probably played a role, but I don't see comparable liberalizations which could encourage global economic growth today. In other words, the ideal antidote is short term stability and medium term growth but you need both to be effective. Short term stability with no prospects for growth is Japan and growth is simply impossible without some level of stability.

The Hard Place: The hard place we don't really know. It's more ambiguous. There are a few different nightmare scenarios here. I'll paint the one I think most troubling. There's no historical equivalent here. This is the argument against those who oppose anything with any government involvement. In other words, against neo-liberal ideological rejection of government aid: see the House Republicans in the States. The scenario here involves why exactly the financial architecture in New York is so important. There are those who argue that we should just let the weak banks fail and eventually the smaller national banks or the stronger regional banks will fill the void. The problem with this argument is that you have to pray that the world doesn't panic when the banks start falling like dominoes. Markets are as much psychology as they are economics. If Wall Street starts crumbling, what happens to all those investors in East Asia and elsewhere who have the United States and its financial institutions as pillars and safety net of their economies? In other words, what if all that US currency and treasuries held in Asia comes home all at once. A run on the US dollar or US debt would have untold consequences.

The United States has been the economic backbone of the free world for sixty years. First because a bunch of people got together in New Hampshire and designed it that way and then post-1970's because people were so used to operating that way. The entire global economy is built on the premise that the United States will be their as the guarantor of last resort. If the US is not seen as a reliable guarantor, the world changes. It is debatable whether a better financial architecture may be possible at the end of a such a change. What is virtually certain is that the change in between would wreak untold carnage in the global economy. Credit markets would become paralyzed. Business would become almost impossible. That's the hard place.


I don't have the third way. If I did I wouldn't be blogging about it, I'd be advising world leaders. I just think it is important that when you hear ideologues on both the left and the right say that down the other path is certain doom, they aren't crazy. As a society, we can neither be ignorant of the pitfalls nor paralyzed by them. These are not easy decisions and they will have profound consequences. However, some decision must be made.

Yet Another Abandoning?

The European Union is looking less and less like a union these days. There was a sense that after World War II, Western Europe abandoned their Eastern brothers to the iron fist of the Soviet Union. It wasn't like there was much that could have been done, but the feeling of regret stuck. I wonder if that is on anyone's mind as the major Western powers once again go deaf to the concerns of Eastern Europe. I wonder what the currency, stock and bond trading will look like on Monday morning in country's like Hungary and Latvia which are teetering on the edge of complete economic collapse. Western Europe again demonstrates its penchant for supporting any worthy cause unless there's actually a cost involved. Canadian and American troops have learned that lesson in Afghanistan and now the economies of Eastern Europe face the same cold shoulder. What happened to fraternity and solidarity in Europe?