Tuesday, September 8, 2009

Some analysis of a confidence vote

If 143 Conservative MPs vote confidence in the government, then at least 144 of the remaining 164 MPs (the speaker is excluded) must vote no confidence to defeat it. If 22 or more MPs of any party or combination of parties are absent or abstain, the government survives. If exactly 21 MPs don't vote then the 143:143 tie is broken by the speaker (Liberal Peter Miliken), who would likely defeat the government.

Since no one party has 144 MPs in the house, no one party can defeat the government. No one party can trigger an election (unless Mr. Harper requests the Governor General, again).

Since no party has declared their MPs will have a free vote, we should assume all MPs present in the house will vote with their party line.

If any MP avoids the upcoming confidence vote without sufficient cause, they express support for the government.

So therefore, any MP absent without sufficient cause is either:
  1. expressing their parties support for the government [cover your ears] EVEN IF THAT PARTY VOTES NO CONFIDENCE, or
  2. expressing their individual support for the government against the party line.
If it's #2 the party should take some action to discipline the individual MPs afterward. If no action is taken, ipso facto it must be #1.

If any party or combination of parties allows enough absent MPs to avoid passing a motion of no confidence, then they should be identified as supporting the government [cover your ears] EVEN IF THOSE PARTIES (THAT PARTY) VOTE(S) NO CONFIDENCE.

Either the BQ or NDP could allow the government to continue, in exchange for something from the Conservatives. However, the Conservatives may think they'd emerge from an election with yet another minority anyway, and therefore wouldn't gain much by avoiding an election. If the Conservatives think they'd lose the election they should definitely offer something, to retain power as the economy improves (another questionable assumption, but it's a popular opinion now). My guess is no deal because they think they'll get at least another minority. Rather, I expect the government to 'dare' the other parties to defeat it with aggressive motions designed to drive election issues and support their platform.

I think the most confusing scenario would be if some combination of absent BQ and NDP allowed the government to survive, with no reward from the Conservatives (e.g. that each thought they'd lose out in an election). In other words an implicit NDP-BQ 'coalition' of support for Conservatives, to avoid an election. Ouch, the tin foil is too tight on my head. If the government comes out with aggressive, ideological motions this won't be possible at all.

So, I guess I'm expecting an election. No predicitions though, yet.

Thursday, September 3, 2009

A simpler question of confidence

The problem with marking some motion of parliament as a confidence matter is that it complicates the issue. Are you voting for the motion or the government? These two are not the same.

If a motion of non-confidence in the government is introduced by itself with no other provisions, this simplifies the question. Do you have (enough) confidence, or not?

Only if a majority of MPs agree will the government be defeated. In this case, it would require all Liberal, NDP and BQ MPs to agree to defeat the Conservative government. No one of them alone, or even 2 together, could trigger an election.

A simpler question changes the perception when favours and considerations are exchanged as justification for support. Side deals are still possible of course, but more difficult to spin since you have nothing to show for your support - just promises. You really must have confidence in the government if you're going on promises alone, quite literally.

Liberals shoudn't vote down ways and means

Liberals shouldn't necessarily vote down a Conservative ways and means motion on September 14th. Especially, not without reading it. It should be given due consideration on its merits. If the motion is an implementation matter (say, of the renovation tax credit) of the earlier spring budget, then perhaps it should be passed for the same reasons the spring budget passed.

The real issues are:
  1. Have the Conservatives executed that budget effectively in a timely manner?
  2. Has the stimulus money been focused on stimulus or patronage?
I have no idea why the Conservatives would wait until now to motion for the reno credit. What were they waiting for (other than obvious poloitical reasons)?

I'd like to read the Conservatives' progress report, or some other information indicating where the stimulus money went. Surely, someone knows.

  • In general terms, perhaps the budget was a reasonable compromise.
  • The budget devil is in the details of its execution.
  • That execution was lacking in quality and timeliness.
  • Poor execution is justification for no confidence.

Sunday, July 26, 2009

An idea to save news

I believe there are several problems with news media today which must be addressed.
  1. News, especially television news, often competes for advertising revenue and is expected to profit. This opens the possibility that the news will favor their advertisers.
  2. Some programs appear to be news but in fact offer opinion and comment on news reported by others. Hosts on these shows usually call themselves commentators and do not claim to be journalists, and thus don't feel bound by any journalistic integrity. They claim their right of free speech; free speech is not limited to unbiased and independently verified work.
  3. Reports might be biased by many different means.
I'd like to see a simple-to-use, voluntary rating system applied to programs which do claim to report news.

It would be impossible to have independent verification of every published article or even every individual reporter. Whole organizations would receive a single rating for all their individuals and articles published. The organization would be responsible to hold its individuals and published matter to the standards described under their rating, or risk losing that rating - and thus affecting the whole organization.

This rating system would be paid for by application fees. Any organization which wants a rating would pay a non-refundable application fee and submit to an audit by the rating organization. Only if the rating organization is satisfied would it award a rating.

The ratings would describe what to expect from the news organization. For example, does it contain original reporting? Does it exhibit any bias? Does the organization employ any independent verification of its facts?

I expect a rating would benefit large newspapers and TV networks which could afford the costs; not just the application, but the corresponding overhead of living up to the rating. In general, people should be more attracted to a rated show than a non-rated show, and enjoy higher ratings. Bigger audiences should lead to higher advertising revenue. Indeed, even advertisers would perhaps enjoy being associated with higher quality news - or even as another demographic or targeting tool for their advertisements after they learn how to use it.

Organizations which can't afford the cost, or which choose not to apply for a rating could still carry on as usual. They might be disadvantaged compared to rated organizations. But that is the whole point - to make bias more visible so that people can decide. In the case of small organizations like individual bloggers, they could appeal for financial support to pay the rating costs. This could be anything from a paypal tip jar, to soliciting private or public sponsors.

Non-rated organizations could still function as they do, and if a rated organization re-reported an article from a non-rated source, they could add value by performing independent verification. Indeed, perhaps a rated organization might only perform independent verification and do no original reporting, and be rated as such. Perhaps this could be a business case itself - I'll leave that to businessmen to determine.

In fact, journalists themselves could set up a ratings system to help in marketing their added value, without government intervention. Simple brand-building, I should think.

The problems in a rating system might be:
  • How to limit bias in the rating organization itself?
  • The ratings organization might be overwhelmed by complaints against rated organizations. Complaints would have to bundled together like class action law suits.
  • Non-rated organizations could systematically attack the rating organization itself. The most damaging attack would be to falsely promote the idea that the rating organization is against free speech. An 'anti-rating rating' could be displayed, where the anti-rating rating conveys no information about quality - but simply a belief in free speech. The impact of the rating could be diluted, or even exploited by non-rated organizations.
I believe even some non-rated organizations would have some interest in backing a rating system. For example, imagine a biased non-rated organization which does no original news gathering re-reporting only those selected facts which support their bias - then claiming these facts came from a rated organization - thus 'stealing' the impression of being unbiased.

Ratings do work for other things like entertainment (movies and video games get ratings like G, PG, R, etc.). Ratings are also applied to certain financial instruments; in some cases these work, in other cases they might need reform - I'll leave that to better experts than me to say.

This post is not yet rated. ;-)

Tuesday, May 5, 2009

Swine flu, the free market and EI

Those who promote free markets, the invisible hand, the efficient market hypothesis and related topics often neglect the social cost and the meaning of equilibrium.

Imagine applying this model to a pandemic flu by allowing the flu to run its course - no meddling intervention from know-it-all physicians. Eventually the spread of the flu will slow and stop on its own. The survivors will likely be more resistant to that flu strain, have better hygiene or perhaps were just lucky. Pity if you aren't a survivor.

I doubt anyone would let a pandemic flu just run its course without trying to do something. No one would stand for that, it can't even be argued.

Now compare that to the financial pandemic affecting our economy. First, corporations and individuals are very different. Even a single human life is much more valued than any corporation. Corporations are soulless and are expected to die off if they can't compete. But don't forget about the symbionts hosted by the corporation, the employees. Finding another host (job) isn't as easy as it seems.

So how to allow the host to die while protecting the symbionts? Employment Insurance temporarily protects workers between jobs, and offers a chance for re-training to find a new job. Is EI meddling or interfering with a pure free market? Probably if it isn't applied uniformly to all. But it does make it easier to allow companies to fail while protecting the displaced workers. [N.B. To those who think those employees could quickly and easily relocate to another job, I ask 'Where?'.]

So I can't explain why someone who promotes laissez-faire economics wouldn't also support EI and support fair and equal treatment under EI. How does it make sense to preserve a system which is not equal and fair across the country? I guess he figures EI is unfair to the employed who contribute to EI. If we treat individuals like corporations, shouldn't those who can't compete fail and make room for those that can? What a ridiculous statement when applied to people.

We couldn't take the same attitude for a pandemic flu. Working for a failed corporation or catching a flu are both beyond the control of most individuals [N.B. I don't expect everyone has what it takes to be an entreprenuer].

Friday, April 17, 2009

Abitibi severance scams

I really feel for the laid-off Abitibi mill workers, though I know none of them. Don't forget the woods workers contract didn't include severance either. It seems AbitibiBowater doesn't recognize much of its responsibility, including to the province and the environment.

Something similar happened to me when I was laid off in late 2002, but not as bad. I collected severance required by provincial law, but my contract specified additional severance which the company refused to pay. They used delay tactics to avoid the courts until their bankruptcy months later, and never paid the additional severance. But at least I got something, more than the Abitibi workers.

I thought employees were considered first-in-line among creditors, but I guess I was wrong. I think perhaps they should be. Pay the severance before the bondholders get anything. I know the bondholders would scream, and in general future bond yields would have to go up to put the finances back into equilibrium, but so be it. They aren't fairly priced now to reflect the risk (of loss by paying severance ahead). Or place the required severance money in escrow somewhere, as employees are hired and as obligations grow.

Employees are different from businesses (e.g. suppliers and contractors), and don't enjoy the same tax benefits (not necessarily tax rates but more deductions, e.g. home office, vehicle, travel, insurance, loan interest, etc.). B
usinesses enjoy those benefits because they assume more risk than employees - at least I thought so.

Contractors often charge more than the equivalent salary or wages of an employee to compensate; employees accept lower pay in return for lower exposure to risk - at least I thought so.

I think the trade-off between risk and reward needs to be re-examined. Businesses have become much better at "delegating risk" to others - isn't that what a "Credit Default Swap" is all about? It seems the share of risk assumed by employees has risen, and it's time to push that back to those who claim the reward.

Those who claim the most reward must bear the most risk. It's only rational.

Friday, April 3, 2009

Afghanistan thought experiment

I've been hearing some about the recent controversial legislation in Afghanistan with regards to women's rights, and I preface this with the admission that I haven't thoroughly investigated this matter. On the face of it, it does sound like legally codified rape within marriage, but I'm also not sure this didn't already exist anyway (not that it should).

But it occurred to me the western world might have bigger expectations than it could justify. What realistic expectations should we have over a foreign nation (and culture) in return for our financial and military aid?

Remember, Canada has long promoted multiculturalism. I personally believe in the concept.

As a thought experiment, consider the following questions:
  • Should an aid-providing nation influence the election of one party in a foreign government over another? Think about Hamas vs. Fatah. Remember, western nations would deny Hamas' right to exist as they would deny Israel. All that said, I'm definintely against violence and war.
  • If the U.S.A. would offer financial aid to Canada (with respect to the current crisis), but demand that we recind our socialist medical system, what would you choose? What would be your price, sir or madam (monsieur, madam, mlle.)?
  • If the world court ordered a stay of execution for a foriegner (for reasons of procedure, say), should the executing nation obey that treaty? Follow up here. OK, this is just a per peve of mine, not directly related to this line of thought. But it is irrational, IMHO.
I find these questions difficult and worth arguing. If you find them easy, I suggest we have different political orientations.

My starting point for rational thinking, is that ending violence should be independent from rationalizing political, religious or cultural views and policies. STOP VIOLENCE NOW, worry about formalisms later. And yes, I understand rape is also violence; read the preceeding paragraph to see I admit these are difficult questions.

Please keep in mind, I'm not advocating one decision over another; I'm comparing the decision methods and criteria. I am advocating the decision methods and criteria should be kept constant across other nations (cultures, groups, etc.) as much as possible.

Short answer: IMHO, you can't enforce laws (either based in religion or not) as long as prisons are blowing up. What judge would defy that?

Tuesday, February 3, 2009

Luxury vs. necessity

Now be warned, this post might not be so rational, probably more speculative.

Given people's perception of a coming recession, they cut back spending. Suppose we classify those spending cutbacks as either necessary or luxury purchases. It's difficult to cut back necessities like heat, electricity, bread, milk, etc. Compared with that, a new television is much harder to justify.

It makes sense that necessity suppliers will fare better than luxury suppliers; some economic sectors and companies are more recession-proof than others.

So, should we stimulate luxury purchases? I doubt many people would be happy about subsidizing ANY luxury purchases for ANYONE. But the employees of luxury suppliers aren't all rich either. They need people (or companies) to purchase their luxury goods so they can buy necessary ones.

OTOH, it's difficult to stimulate necessary purchases. Oil is cheaper now, but you can only turn your thermostat up so far, you can only drive so many extra miles.

GST and personal tax cuts would seem to make sense. The extra money is disposable, "found" money which could be used on luxuries. But people don't have to spend that money, they have the option to save it.

So here's the question: are savings necessary or luxury?

I believe savings are either luxury or necessary, relative to how much you've saved already. Excessive savings could be luxury; retirement funds are necessary. If you think your retirement or rainy-day accounts are to low, or if you feel your job is at risk you might save as necessary. If you've saved enough for necessities you might still save rather than increase your luxury purchases; if you're that wealthy, a small tax refund won't do much to change your behavior.

So if tax cuts won't save the luxury sectors, what about government infrastructure spending? I doubt shovels in the ground will stimulate purchases of crystal artwork either directly or indirectly. Any trickle down from government contractors and their employees will probably have little benefit to the luxury sector.

So I think neither tax cuts nor infrastructure spending will boost the economy much. I think infrastructure spending might be a good idea anyway even if it isn't stimulus, if it's spent on necessary infrastructure and if the recession provides a "buying opportunity" as Mr. Harper suggests.

I think we just have to wait it out, until enough people have enough pent-up demand for luxuries. It'll happen eventually, and I don't see any way to arbitrarily accelerate it.

And thanks to Red Tory for re-kindling my inner Monty Python fan.

Will our children remember these days like the four Yorkshiremen?

Wednesday, January 28, 2009

The amendment might be a mistake

So the amendment just demands progress reports. That seems like an offer the Conservatives can't refuse, and the budget will pass. How could the Conservatives justify NOT giving these reports?

If the implementation falls short (I'm just speculating ;-) the opposition will beat down the Conservatives with each report. If a report is bad enough, a confidence vote will trigger an election. Sounds great for Iggy and the opposition, right?

Unless the reports are good.

If the stimulus works, then this is great campaigning for the Conservatives that could deliver that majority and rescue Mr. Harper. What am I worrying for, anyway - if the stimulus worked we should all be happy.

Although... what if the reports are good, and the economy isn't? What's the chance that Mr. Flaherty would deliver misleading numbers? I mean again, having been caught already?

This ploy to force Mr. Harper to expose any gaps in implementation of the budget may work. I hope it does. As each report comes out it must be scrutinized and verified. The Harper Conservatives have been less than truthful in the recent past, and it doesn't seem to hurt them at the polls as much as I'd expected. So, I wouldn't expect the Conservatives to lose much support if they exaggerate success in forthcoming reports.

The only good side to this amendment is a possible 'out' for Iggy to avoid responsibility for the budget, e.g. "I wouldn't have taken these chances, or screwed up the implementation," etc. But the NDP and BQ will (rightly?) point out the Libs had the chance to vote it down and didn't. It may work, it may not - it'll all depend on the mood of the swing voters when the time comes.

Speculation about a budget amendment

Suppose Iggy proposes an amendment to the budget. He can do this before deciding whether to vote for or against the budget. Offering a proposal makes the Liberals appear more collaborative, co-operative, constructive, etc.

There are three outcomes:

A) The amendment fails to pass. This means it was not supported by either the government, the NDP or the BQ. OK, I guess either the BQ or NDP could support it, but not both. Result: Iggy can safely pass the budget and avoid accepting responsibility for it. Since the coalition didn't support him he can justify not defeating the budget based on that lack of support from partners. Further, Iggy can run an election campaign filled with "I told you so, but you didn't listen".

B) The amendment passes with coalition support. I don't expect this, because then it would force the coalition to vote for the budget. After all, why pass an amendment then defeat the budget? It makes you look foolish. However, it could happen - how could the NDP argue against the ideas of a Liberal partner? I'll leave that as an exercise for Mr. Layton.

C) The amendment passes with Conservative support. Depending on what's in the budget this could anger the Conservative supporters further, a dangerous choice for Mr. Harper. It makes him appear even weaker. I don't expect this outcome is very likely, but it is possible. Voting for the amendment would guarantee passage of the budget and continued government. In this case, expect Harper to return and exact his revenge in the future sometime. To quote Mr. Burns - "I'll let the sword of Damacles dangle about his head, while I bide my time. Yes, excellent." Result: Iggy demonstrates he's the most powerful man in the house, and gets what he asked for - so be careful. On the downside, he must share the responsibility which is probably suicide.

I expect Iggy's best outcome would be A), so I expect a very aggressive amendment designed to fail, yet provide help for the next campaign. EI restructuring, limits to tax cuts and easing restrictions so municipalities can access the money easier, faster are my guesses.

We'll see, in just 3.5 hours.

Overall I thought the budget was the best I expected from Harper, and I must give him full credit for trying. If you've seen my comments around other blogs, I never expected Harper to deliver a budget with so little conservatism - and my evidence is over at the Blogging Tories. He certainly appears to be on the ropes... for now. But he must not be underestimated.

Friday, January 16, 2009

Spending cuts are the key? To what?

Martin Masse at the FP writes here: Spending cuts are the key - FP Comment.

He argues government spending during boom times diverts resources away from business, which artificially inflates particular sectors relative to others.
When governments launch massive spending programs, they simply grab more of the factors of production that businesses need, which keeps the economy down.
I have a few problems here.

What past massive spending does he mean? I was under the impression that we hadn't spent enough public monies on infrastructure, that it desperately needed renewal. I thought we'd cut spending to balance the budget. If there was an increase in spending in, say, the last couple of years, that still couldn't explain his point - that spending would be too recent I think.

Which sectors were inflated by government competition? Automobiles? Credit? Real estate? High tech and IT? Really, I don't know what he's talking about here. I don't see the evidence that past inflation or bubbles were created by too much government spending.

I thought stimulus spending seeks to employ idle resources. If the resources are idle, then how is there competition and thus inflation? If the resources are NOT idle, why is the economy shrinking? There is a decent point underneath this, though: the government shouldn't outbid private industry for already employed resources, if at all possible.

When I see opinion without any facts or data to back it up, I usually see red flags waving.

Wednesday, January 14, 2009

Crass politics in NS

David Jackson at the Chronicle Herald reports the public accounts committee would like to question the [PC] government about the state of the provinces' finances - before the budget in June. That's 6 months after the update of December 19.

So now a two month prorogation doesn't sound so bad, eh?

PC MLA Jamie Muir said "I think you're playing crass politics, and I'm not sure that's the place of this committee," in an accusation directed at NDP opposition MLA Graham Steele.

It isn't crass politics for the opposition to demand updated information during a 6-month government absence from the assembly, especially with the current economic climate.

NS is expecting an election this year, and I expect the PCs are planning their election campaign around the release of fiscal and economic news. Especially, they're probably waiting to see what the federal budget looks like (assuming it passes) and to see how that affects NS. But that's life - the government gets to set the agenda to its own favour.

But both the federal Conservatives and the NS PCs are withholding fiscal and economic information from the opposition. How can the opposition do its job without that information? It can't, and that's the point. Again, this is the privilege of the government to withhold that information and this isn't new either.

But don't accuse the opposition of crass politics because its doing its job. That's crass politics.

Tuesday, January 13, 2009

Oil bubble inside the credit bubble?

60 Minutes asks the question "Did Speculation Fuel Oil Prices Swings?" in the video below.

Near the end of the article, Steve Kroft writes:
The oil bubble began to deflate early last fall when Congress threatened new regulations and federal agencies announced they were beginning major investigations. It finally popped with the bankruptcy of Lehman Brothers and the near collapse of AIG, who were both heavily invested in the oil markets. With hedge funds and investment houses facing margin calls, the speculators headed for the exits.
So was there a vicious circle? Did a decline in the credit market cause LB, AIG and others to sell their oil futures, causing a decline in oil prices, so that their remaining oil holdings value declined, causing further ratio problems, making credit problems appear more severe?

That is, was there an oil bubble inside the credit bubble? How were the two problems linked?

Watch CBS Videos Online

Perhaps cutting interest rates simply isn't enough to offset losses on oil futures.

Sunday, January 11, 2009

8 Reasons Why Big Business Prefers a Carbon Tax

I think BigCityLib asked an interesting question in this post: Exxon Supports A Carbon Tax Because...
But, given our last federal election result, is one still a viable policy option in Canada, or are we stuck with some version of C&T merely because it has the advantage being, in effect, a hidden tax, and thereby palatable to our bovine electorate?
I would have to answer yes to this question, but for the bovine electorate. I don't find that part particularly offensive, I expect its just the passion this topic brings out in people. I left a long comment over there, the comments are interesting reading. So I'm expanding that comment into a post.

So here's my list of why big business prefers a carbon tax over cap & trade (C&T):

1. Raise public discussion to confuse and delay action. As long as the battle is still active, you haven't yet lost.

2. It strengthens the position in the voters minds and gives talking points to right-wing pundits.

3. Carbon taxation is friendlier to business and the economy than C&T, especially if that tax is very small or negligible. "See: we're doing something! Look at the millions of tax dollars! How can you say it isn't enough." A carbon tax with real teeth would bring in a lot of revenue, not a few million dollars.

4. They can argue for a carbon tax to be revenue neutral there must be corresponding decrease in corporate taxes to offset the carbon tax. And by corresponding I mean much, much greater than resulting in a net drop in corporate tax revenue.

5. There are no limits to the price of carbon in C&T - it is determined by the market. You could easily imagine "bubbles" and speculation driving carbon prices to insane levels. Carbon competition is another competitive threat to a corporation. This is why I favour a carbon tax - it is much easier to predict and control the economic effects, where C&T controls the pollution and lets the price float as per the market. Big business wants a system that won't burn them like fluctuating energy prices have.

6. As BigCityLib points out, a carbon tax is more visible to consumers (voters). C&T costs get bundled into prices, and consumers would blame the companies for higher prices. But they'd blame a carbon tax on the government (and hey, what is the government wasting this new tax grab on, anyway?).

7. There are no limits on pollution with a carbon tax. Business is under less pressure to "green up". Hey, that tax isn't their problem, it's the governments'.

8. Someone has to perform the trading, which drives up administration costs compared to another tax.

While those reasons suggest C&T may be superior, I still prefer carbon tax. I'm disappointed with the last federal election and I expect a federal Canadian carbon tax is mostly dead, especially if Obama goes with C&T.

But doing either a carbon tax or C&T is better than nothing - unless the tax and caps are close to nothing. David Gow at The Guardian writes that carbon trading isn't working in the EU. It seems too many carbon credits were issued by governments and the resulting price of carbon was just 1 Euro/tonne.

In short, my position FOR carbon tax over C&T is that we've seen a lot of market volatility latey in everything: equities, bonds, currencies, interest rates, commodities. Why introduce another artificial, arbitrary market which could be just as volatile? Probably more voltile, IMHO.

I'll be watching the B.C. provincial election to see how their carbon tax fares. Mostly dead is also slightly alive.

When I get time, I'll try to make a list of why C&T is better than a carbon tax (like real limits to poloution, maybe). Unless someone beats me to it... any takers?

Saturday, January 10, 2009

New poll - how do you decide your vote?

A comment from janfromthebruce reminded me of something I've wondered for a while. Different people use different criteria to decide their vote. I like to consider policy, but I know some people who decide by their local candidates (e.g. they'd vote for any party with a good local candidate).

There was a poll released in mid-December that claimed many people (51%) thought they voted directly for the Prime Minister. I don't think that many people were wrong, I think the question might have been interpreted to mean "vote for the local candidate of the party with the leader I'd like as PM."

But in the latest Nanos poll puts Ignatieff ahead of Layton. If some voters choose their local candidate based on leader (and I would argue Dion had this effect last October), then could some voters shift from NDP to Liberal?

Or could other factors such as a percieved shift of the Liberal leader to a more right wing stance affect voters deciding based on party policy?

How many of each? And so forth.

So I put a poll in the left-hand margin. Feel free to leave comments here.

Friday, January 9, 2009

Comics and politics

Avengers, assemble!

If only I had photoshop talent, I'd do a mashup of Flaherty and The Shoveler.

Favorable Liberal poll - another nail in the coalition coffin?

Nik Nanos released a telephone poll taken January 3-7, showing the Ignatieff-led Liberals have passed the Harper-led Conservatives:
  1. Liberals 34%
  2. Conservatives 33%
  3. NDP 19%
  4. Green 7%
The BQ has 29% in Quebec, and Quebec has about 25% of Canadian population, so I infer that the national BQ support must be close to 7%, which makes the above total roughly 100%. But since the BQ only runs in Quebec that's probably irrelevant anyway.

The poll also suggests Conservative support has increased in the West, but I think it's hard for them to increase their seat count much at all (they're pretty near 100% already). That means less support in the rest of Canada, possibly fewer Ontario seats, probably fewer Quebec seats.

Stronger Liberals numbers in Quebec and Ontario could raise their seat count quite a bit. With a little luck, some soft voters who supported the NDP in the last election might switch their support. It's optimistic but not unrealistic that Liberals could form a minority government with those numbers. I hope they last.

But why would Mr. Ignatieff form a coalition now, risking the possibility of a minority later? Perhaps these poll numbers are sufficient defense against an abuse of confidence votes?

The result which interests me is the shift of support within Quebec away from the BQ to the Liberals. If the BQ would lose seats to the Liberals, wouldn't they want to avoid an election? But to avoid an election, there is a strange potential that the BQ could support the Conservatives. That just doesn't sound right.

Will EI be the critical budget item?

I expect the upcoming budget to contain tax cuts. You can't expect Conservatives to bring out a budget without them. It wouldn't be fair to expect a complete capitulation and get only 100% of what the opposition asks for, and nothing the Conservatives want.

I also expect infrastructure spending. No one denies it's time for shovel-ready projects. However, the projects presented in the budget should be examined to see whether they're a) re-announcements of already committed money vs. new money, and b) really shovel-ready for 2009 vs. spending programs over several years. Past Conservative announcements seem very prone to these two, IMHO. Anyway, I think any party in government would have some trouble finding shovel-ready spending.

But Mr. Harper in a CTV interview (check out Scott's DiaTribes and Far and Wide) said he doesn't want to make EI more generous. However, if EI measures are omitted from the budget I wouldn't see this as a dirty partisan trick; only a different set of values. Ones which I don't share. What I don't think is fair is generalization of EI as paying people not to work. EI is an insurance system against downturns just like this one (although I won't speak to how effective it is nowadays). Honestly, without it what can you do? Use your savings (sell investments? I thought there were buying opportunties), move somewhere to a new job (where is that, now?), start your own business (like what?).

Strengthing EI was one of three priorities Mr. Ignatieff mentioned in response to a "first-100-days" question in his first town hall meeting. I hope he stands up and pushes hard for an EI boost. Unemployment is both an economic and a social problem. Flaherty says he expects big job losses soon. The CCPA plan suggests $3.4B for EI. Carol Goar has a good article on EI repairs.

But can Iggy support a budget without an EI boost? Maybe. But how will that reflect upon him? Is it something the BQ and NDP will dress him in for the next election?

Can Harper put in something for EI? Maybe. I doubt it, based on past performance. The opposition will claim whatever EI love he gives as not enough, and his own party might not support the EI measures. It could be lose-lose for Harper to put any EI help in the budget.

Charts comparing this and previous recessions

The Digerati Life has a post with charts of the current recession overlaid on the average of all previous recessions post-WWII.

It looks to me like this mess is going to last a long, long time. The best chart IMHO is unemployment which tracks very closely with the average. If we can avoid extraordinary unemployment (e.g. the equity market declines already appear extraordinary) we might be getting off easy.

Thursday, January 8, 2009

Back from Iggy's 1st town hall

As I write this I realize my notes are incomplete and reflect my personal interests, and how difficult a reporters job is. Note to self: improve note-taking skills for next time.

The venue was a small theatre at Neptune with a sold-out crowd. They (Halifax Chamber of Commerce) had to add a second meeting tomorrow afternoon.

Mr. Ignatieff said he would value the upcoming budget using a quote from Joseph Howe: "What is right? What is just? What is for the public good?" He also wants to know how much of the spending is "shovel ready", i.e. how fast can the money be disbursed.

The spending should be green, but qualified that could apply to evolutionary improvements as well as brand new technologies. He'd like to see the GM deliver the Chevy Volt.

Scott Brison followed that with an example he called the Atlantic Energy Corridor, which could deliver green electricity (wind, tidal, hydro) to markets outside Atlantic Canada. It made me wonder about how to deal with NS Power as both a generator and a distributor, yet competing with other generators (see my earlier post).

Mr. Ignatieff suggested spending on summer employment for students.

Mr. Brison said he'd like to change the tax system to encourage venture capital, referencing Ireland as an example.

Mr. McCallum said we need to get banks lending again. I didn't quite hear everything he said, and think he simplified that a lot as was necessary for the time allotted. IMHO that's a pretty detailed and complex topic to get into in this context.

A question asked Mr. Ignatieffwhat he'd do in his first 100 days if he were PM on Monday. He joked that part of the question sounded pretty good. He simplified his answer to 3 points:
  1. Tax cuts for low- and medium-income workers, and a possible one-time-only income boost
  2. Changes to EI including a reduced waiting period, faster claims processing and equality of qualification across the country
  3. Shovels in the ground, by spending 80-90 hours/week on the phone to every mayor in the country to find out what they can spend right now. Halifax mayor Peter Kelly was in the back of the room, and joked (I think) he had a $1.2B list for him.
One of the last questions asked if he still supported the coalition. He replied "my position is still coalition if necessary, not necessarily coalition." He said he would not compromise the unity of Canada or his liberal values, and re-iterated the Joe Howe quote "What is right? What is just? What is for the public good?" He said he wouldn't dismiss the coalition as an option, saying Mr. Harper had acted quite unpredictably and against the public interest by pulling $6B out of the economy instead of stimulating it.

My interpretation or opinion is he genuinely wants to keep his options open, and wants to see the budget before making any decision.

Budget, election, coalition? More fretting.

I think may be right about a federal election this year. Even if the Liberals support the budget, Mr. Harper will be aggressive in parliament proportional to the Conservative poll numbers. Eventually he will introduce a confidence measure with a poison pill, and the government will fall. The further in the future, the less likely the Governor General will look for a coalition. That leaves the only way to avoid an election in the next 18 months is the Lib/NDP coalition real soon now. But at what cost to the Liberals?

Three things could happen:

1. Liberals support the budget. I agree with Ms. Hébert, it looks like the very things the Liberals are calling for such as infrastructure, spending rather than tax cuts and some love for EI may be omitted from the budget. Instead I expect tax cuts, which I personally oppose (I prefer the CCPA plan). It would be very difficult to express confidence in a budget which proposes the opposite of your position, and also difficult to have people believe your confidence is sincere.

2. A coalition forms. The GG calls Iggy and asks if he can govern. If he refuses, an election is the only option left (see #3 below). If a coalition takes power, they'll face unrelenting criticsm of how their spending failed to create anything but a bigger deficit. The newly-jobless will soon wonder if maybe corporate tax cuts might have created more jobs. The Liberal spin could be "it was either this, or an election - the GG perfered the coalition, it was her call not mine".

3. An election is called, and it's blamed on the Liberals by the Conservatives (for defeating confidence - and that NO budget could've satisfied the power-hungry opposition) and the opposition (for not pushing the coalition). I can't find any polls for 2009 yet, but I wonder if Iggy as leader has changed the numbers much yet. I expect some anti-Dion votes to return, and possibly some soft Conservative votes to choose Mr. Iggy over Mr. Harper. I think the best Liberal spin on this would be "it was either a coalition or an election, confidence was not possible - it was the Conservatives who forced this election, and at the worst time".

3a. Liberal minority. Iggy seems to be doing better in Quebec, and the spending vs. tax cut battle could shift some Ontario power to the Liberals. They could probably govern with a minority better than the Conservatives. 'Nuff said.

3b. Conservative minority. Another waste of election money while the economy continues on its laissez-faire path. However, Conservatives would have to take the blame (or credit) for economic conditions - it would be hard to blame the opposition in this case (but they would anyway, for the interruption).

3c. Conservative majority. AHHHHHHHHHHHHHHHH! My minds eye is blind. Fortunately, I think this is least likely of #3.

I think #1 is least likely, but that's for Mr. Harper to decide. If he governs like he has a minority, he could introduce an acceptable budget. I won't hold my breath. What's in it for Mr. Harper? Another dysfunctional minority and less Liberal support than before (I hope). If he believes there is no solution for the economy and he'll take the blame for it anyway, he might as well try to get some things done that fit with his ideology and ignore the economy (but don't make it so obvious this time).

Of #2 and #3, it's too hard for me to say. But these are the choices for Mr. Iggy. If he thinks he can win a minority after considering the impact of triggering another election, that might be his best outcome - but the risks are #3b and #3c (ACK!). Otherwise, I expect #2.

(BTW, I just can't resist typing 'Iggy', and now I type 'Mr. Iggy'. The shorthand is literally irresistible)

Tuesday, January 6, 2009

CCPA Stimulus ideas

The Canadian Centre for Policy Alternatives has a pretty good report here (pdf). Runesmith has a good post on it.

An EI boost seems like a good idea, people aren't likely to just save that money if they're unemployed. Further, if more people keep their jobs than expected (say, due to other stimulus) there will be fewer EI applicants, right?

Similarly, help for poverty action, low income seniors and the working poor would be spent not saved. And those people would need help the most.

I really like the Pension Guarantee Fund idea. I expect anyone close to retirement might be pretty worried about their pension now, making an excuse to cut their spending. Further, if a pension fund fails it sends a BIG message about lack of confidence in the economy. It's the same situation for retirees with RRSPs, but I don't see how you could help boost RRSP value except through general recovery of equity values. Anyway, if someone does retire it potentially opens a job for a replacement.

Affordable, green housing and renovations for seniors would directly stimulate the construction industry to offset any decline due to residential mortgage difficulties. And I think there is an increase expected in the proportion of the population as seniors, so this would be a good time to invest ahead of that trend.

Even if infrastructure doesn't provide the stimulus we all hope for, it still makes sense to buy it while it's cheap. As well, there have likely been many technological advances (green and otherwise) since the last infrastructure build out that should be of advantage now, whether in cost, quantity or quality.

Tax cuts would only help those who're paying tax, which are the most likely to save any extra for a rainier day. Specifically I think past GST cuts weren't much of a stimulus; more of the same won't be any different.

Questions, suggestions for Iggy's tonw hall?

Or suggestions for me, like things to pay attention to, maybe for later blog fodder. I'll be attending his town hall on Thursday. Feel free to offer some comments below. I'm new to politics, I've never been to one of these. Mostly I want to listen to his reactions from others; I hope their ideas are better than mine. I've been spending my idle time over the holidays thinking about stimulus, and honestly I come up short. Another post, perhaps.

I don't expect to learn much that isn't already known. This wouldn't be much of an opportunity to announce anything new, I think.