Posts in Uncategorized
A scrap of fatuity

Former Canadian Foreign Minister Lloyd Axworthy wrote yesterday that:

We are on the verge of a transformative international event. The International Criminal Court is expected to issue an arrest warrant today for Sudanese President Omar Hassan al-Bashir on charges of planning and executing a systematic campaign of mass terror in Darfur. This would be the first arrest warrant issued by this court for a sitting head of state and an important declaration to the world that no person, no matter how powerful, is immune from the reach of justice in the 21st century.

Not that old Lloyd was and remains a man with a pernicious habit of mistaking words for deeds. But President al-Bashir is completely, contemptuously and very obviously immune from the reach of justice unless someone actually goes and arrests him. If not, talk of this sort, from the Court as well as armchair vigilantes, simply creates a dangerous and demoralising gulf between our goals and our means. The resulting collapse of our windy aspirations doesn't just disillusion well-meaning people. It causes us to neglect practical measures we might take to improve our security. Given how badly that approach worked in the past, for instance in the 1930s when college students in the U.S. mounted a "strike for peace" that inexplicably didn't stop Hitler, I wonder if we might do a bit more thinking and a bit less bloviating now.

Naaaaah!

Book-keeping... and writing

The National Post observes that the White House expects Barack Obama's nominee for U.S. trade representative, former Dallas mayor Ron Kirk, to be confirmed despite being the fifth of Mr. Obama's nominees to run into tax trouble. I was going to ask whether it's only citizens, and Republicans, who are expected to file accurate returns. But I was distracted from this line of reasoning by the Ottawa Citizen story that "disgraced" former Illinois governor Rod Blagojevich has signed a six-figure book deal to write about the dark side of politics according to "his publicist". Man, the cycle of disgrace, repentance and redemption has sure become short... and lucrative. Oh by the way, both men are Democrats, a detail the media seem to have overlooked in their reporting.

Open security

It might seem odd that on the day of President Obama's visit to Ottawa a newspaper would publish details of his limousine's security features (the Ottawa Citizen, on A5; it doesn't seem to be on their website). But it is a feature of open socities that we have open discussions of everything including of threats and responses. And while it's true that in any given instance the revealing of specifics might seem helpful only to the bad guys, the cumulative effect of having everybody able to analyse, discuss and suggest improvements is immensely increased security. (Hmnnnn. Maybe there's a lesson there for those who would use the power of the state to silence potentially offensive speech.)

UncategorizedJohn Robson
Stone killers

With pepper spray becoming a weapon of choice among punks and thugs in Winnipeg, the Globe and Mail reports, the Manitoba government is moving toward can control. Here on the fringes we used to make jokes about extending the "logic" of gun control to other weapons but, as so often, satire cannot keep up with government. If the bad guys are eventually reduced to hitting citizens with rocks we'll get a movement for the registration of stones and, probably, pointed sticks as well. The alternative would be to admit that cans don't spray people, people do. But that would involve holding folks morally accountable for their choices which will never do, because if there's one kind of control that's not popular these days, it's self-control.

UncategorizedJohn Robson
Your salary is my salary now

The usual suspects are saying the usual things about the Obama Administration's move to limit the compensation of top executives of firms the U.S. government is bailing out. I agree that the gleefully populist tone of many supporters of the measure is unsightly. And I take the point made for instance by Terence Corcoran that it's a dangerous precedent, bad for the economy, harmful to entrepreneurship and so on. But remember that these are firms who went crying to the government which, to borrow from a country song, wiped their tears with taxpayers' money. If they are happy to let government deal with their failures they can hardly complain when it also deals with their successes if any. And they have a lot of gall, especially after diving wailing into the subsidy trough, to defend their right to extravagant compensation for having failed so badly as to make it necessary. Men and women of honour would, I suggest, have spontaneously renounced lavish compensation under such circumstances and, for that matter, been a little less greedy even in good times. Enormous salary differentials are demoralizing in companies as in sports teams and who wants to demoralize their underlings? Besides, maybe it's just me, but $20 million a year seems like plenty even if you are really really good.

UncategorizedJohn Robson
Spending ourselves silly
Now it's obvious what the pre-budget leaks were about. They were softening us up, so when we saw the actual $84.9 billion five-year deficit figures we'd go, oh well, that's only $20 billion more than the $64 billion over two years they already said, and what's $20 billion to government? Other than a giant familiar debt sinkhole, I mean.

For numbers like that, we might as well have elected a Liberal government. Or not; the front-page chart in Wednesday's Citizen showed a flood of Mulroney Tory red ink followed by a decade of Liberal surpluses and now more Tory red ink. You don't have to like Liberal governments (and you know I don't) to acknowledge they seem to be better financial managers. But facts are facts.

Including that it's silly for people to talk about this Tory government abandoning "its conservative antipathy to spending." It hasn't got one. Never did; it inherited spending of $209 billion, and promptly hiked it to $222 billion, $233 billion then $237 billion in good times. Now in hard times it's to rise to ... say, they didn't mention that in their press release, did they? Or in the budget speech, come to think of it. Nor did the press dwell on it; I had to get to the 19th page of Wednesday's National Post for John Ivison to blurt out that the spending target five years out is $293.7 billion.

It sounds like a lot. But it gets ignored because everyone seems to grasp that politicians don't control spending, it controls them. Under the comparatively prudent Liberals, spending rose from $163 billion in 2000 to $209 billion in 2006 -- about $7.5 billion a year, less than the Tory good-times average of $9.5 billion but still a relentless upward march.

Governments babble solemnly about prudence and decisions on budget day, but structural dynamics, not specific decisions by finance ministers, drive spending up faster than economic growth, in good times and bad.

The Citizen editorialized, "The prospect of five years of deficits, totalling $84.9 billion, is scary. The government has no way of knowing how long it will take to pull Canada out of that hole. Nevertheless, it has no choice but to dig it." And it is scary. But the Tories had choices; they just didn't make any. Remember Finance Minister Jim Flaherty's November statement to Parliament that the days "of those chronic deficits are behind us"? Ooooh. Sounds good. But he was just telling us what the current projections said and trying to claim credit. Now they show something different, and the government talks as if it did that on purpose too. Phooey.

For that reason I am disinclined to quarrel with Mr. Flaherty's vexatious hammering home of the focus-grouped catch phrase "Canada's economic plan" (as in "Budget 2009 is Canada's economic action plan"). It is not Canada's economic plan; Canada doesn't have a "plan" and if it did it would be for entrepreneurs and workers to create wealth in a free enterprise economy and the government to march in and scarf it. The budget is the government's economic plan, not Canada's, and someone who cannot tell the difference ought not to be in Parliament at all, let alone on the Conservative benches. But since the government has no plan, and is simply being tossed like a cork on a stormy economic and budgetary sea yipping about its master plan, such a complaint, though accurate, would be irrelevant.

Dan Gardner wrote in Wednesday's Citizen, "In theory, there's nothing wrong with debt. What's a mortgage but debt? When the economy goes south, it makes sense that government would borrow and spend to juice the economy." His main worry was that the government wouldn't balance the books once the economy recovered. But there's no more evidence that deficits "juice" the economy than there is that they keep away purple dragons.

Whatever happens next, good or bad, the government will say it would have been worse without their prudently deciding to run these Goldilocks deficits, not too big, not to small. Unless of course their projections prove to be comically wrong in which case they'll insist that the new actual deficit figure was the genuinely prudent carefully chosen course. And there will be no more way to test that proposition than to determine whether $84.9 billion in deficits kept the purple dragons off or if they were not going to appear anyway.

By the way, as you look at the careful spreading of "stimulus" spending among regions, interest groups etc., can anyone point me to a theory that distinguishes that stuff from "pork"? I didn't think so. But I know several economic theories that say what deficits do. Those theories say the problem with Dan Gardner's analogy is that this spending is all mortgage and no house. What caused decades of deficits wasn't bad decision-making but politicians overwhelmed by circumstances and insufficiently endowed with understanding or courage, and so they spent money they didn't have to avoid choices they couldn't face.

That's what we've got again. And no theory, not even one with purple dragons in it, says it helps the economy.

[First published in the Ottawa Citizen]

UncategorizedJohn Robson