07 May 2016

Measuring Thick: business edition #nlpoli

You cannot manage what you cannot measure, says Des Whelan, president of the Board of Trade this year.  Des gets a column in the province's largest daily newspaper.

Des is right.  You cannot manage what you cannot measure.

Unfortunately for Des, we can measure the Board of Trade's record on the public sector spending, debt, and policies over the past decade.

We call the measure  Thick.

Thick measures 4.

Des claims that the Board of Trade opposes the levy in the new budget because it "can deter investors and newcomers to our province; two things we desperately need right now."

Investors aren't going to be frightened from coming here because of a levy.  

Investors don't come to places where the government uses the legislatures strip companies of property based on a lie, with the complete support of the local business community. The St. John's Board of Trade supported the expropriation in 2008 of property belonging to three companies operating in the province, one of them based here.  The Board sat by as the government striped them of their property, quashed a court case without compensation, and set up a kangaroo court to dictate compensation. 

The government claim - that one of the companies had violated a 1909 agreement - was a lie.  The government actually wanted to strip the companies of their hyo-electric assets.

Investors shy away from places where the local business community opposes free trade. In December 2012,  the Board of Trade supported the Muskrat Falls project that, among other things gave the government-owned electricity company a monopoly on the production of electricity sold in the province. Investors don't like a place where the local business community acts against its own bets interest by driving up costs needlessly. 

Investors shy away from a place where the local business community kept silent as the government spent beyond its means year after year after year.  In some years,  the business community cheered for the overspending.

Investors don't like a place where the leaders of the local business community can't do basic math. Here's a quote from your letter  " In fact, our debt is as bad, if not worse than when we started producing oil."  The public debt in 1997 was $6.335 billion. The public debt in 2016 is $15 billion, with a forecast to grow by another eight billion just to deal with chronic overspending.  It will grow at least another $3.0 billion just to pay for the Muskrat Falls fiasco, which the Board of Trade endorsed enthusiastically.

15 is worse than than 6.3.

It is 2.38 times worse, to be precise.

15 plus 8 plus 3 is 26.

26 is a heckuva lot worse than 15 and it is way worse than 6.3.

26 is 4.1 times worse than 6.3, in fact.

Acting against your own best interest is a pretty thick thing to do.

The board of trade has acted against its own best interest in at least four ways, just in the past decade.

The result is that public sector debt will be more than four times larger in the very near future than it was the year folks started pumping oil from the ground offshore.

You cannot manage what you cannot measure.

We can measure Thick.

It measures 4.

That is also the measure of hypocrisy.

Keep your advice, Des Whelan.

The province has had enough of it.

$26 billion enough.


Board of Trade Thickness Past

"Gimme that old-time religion"  (March 2015)
"Budget basics:  debt"  (April 2014)
"Budget basics:  unfunded pension liability"  (April 2014)
"Some help for the St. John's Board of Trade" (July 2012)