15 December 2008

"Solidarity, Reg", patronage appointment version

Somehow this slipped your humble e-scribbler's notice.

Provincial New Democratic Party leader Lorraine Michael knew back in September what most New Democrats would understand:  a conservative is a conservative is a conservative.  That's what she said back in September when the who Family Feud thingy was on the go during the federal election.

Well, for all those who think that labour is aligned with the New Democrats, think again.  Outgoing labour federation boss Reg Anstey stood four-square behind the Provincial Conservatives in September.

That's not the first time Reg showed his solidarity with the current administration.

Remember the Rally for Danny?  There was Reg.

How about attacking the Liberals and New Democrats last spring for daring to suggest pattern bargaining in the public service should go the way of the dodo?  Reg was there to slice into the government's political opponents.

He took his leave of the labour federation in the first week of November, telling reporters he didn't know what he was going to do with himself now that he'd retired.

Less than two weeks later he had a sinecure on the offshore regulatory board, courtesy of the Provincial Conservative cabinet.

Loyalty clearly has its rewards.

-srbp-

Fowler missing in Niger

He was deputy minister at National Defence through the Somalia debacle.  Now he's gone missing in Niger while on a diplomatic mission.

How long before Scott Taylor turns up doing interviews about the missing man, Bob Fowler?

Notice that the Globe's update discusses everything in Fowler's career except what he is best known for.

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Floundering

Question:  In what year did Earle McCurdy and the fisheries union not go to the provincial government looking for cash to bail out the fishery?

The economy is booming.

Earle tells us the fishery is in trouble and needs a government bailout.

The economy is tanking.

Earle tells us the fishery is in trouble and needs a government bailout.

McCurdy's answer to problems in the fishery is - of course - more of the same sort of thinking that got everyone into this mess in the first place. He is to fisheries management what Taco was to 1980s popular music.

Too bad Earle makes the news while people who actually have a roadmap out of the mess get ignored again and again and again and again and again... .

-srbp-

14 December 2008

Local math prof stirs international economics controversy

Odds are no one heard of Antal Fekete.

The Hungarian-born emeritus professor of mathematics at Memorial University in St. John's isn't someone local media  look to for commentary on economic issues.

But through a series of articles published on his website - professorfekete.com - he's earned some measure of international notariety for his arguments about backwardation of gold, the problems of unsupported debt and the global economic crisis.

Backwardation is the phenomenon of spot gold prices being higher than futures prices.  That situation happens frequently in other commodities but seldom in gold.  The difference is that gold, once used as the ultimate support  for paper currency, is a monetary commodity.

It's also a clue that the commodity is, or is perceived as being, or will be in short supply.  Logically, no one would buy gold today at a price higher than it could be purchased in as little as two weeks time.  The only reason to do that would be in a case where there was some doubt about delivery in the future.

Here's the way Professor Fekete describes the situation in his most recent article:

We are facing a pathology of the international monetary system based, as it is, on irredeemable promises to pay. People are enjoined through 'legal tender' legislation to use these irredeemable promises as if they were the ultimate means of payment, even though they are not, and the world would rather use gold and silver as the natural and ultimate extinguisher of debt. But gold and silver have been coercively eliminated from monetary circulation for the competition they offered to synthetic debt-liquidating devices.

Mainstream economics pretends that the issue has been settled for once and all. It asserts that liquidation of debt through the coercively maintained payments system has no threat to the national and world economy. Yet what is happening is that the government keeps kicking the toxic garbage upstairs which keeps accumulating unobtrusively in the attic, only to come crashing down in its own good time to cause untold amount of social damage.

In the real world it is natural law, rather than man-made coercive laws, that prevail. The pathology of the regime of irredeemable currency has not been attended to, and day of reckoning has dawned. Our pathological monetary system has allowed the burgeoning of debt beyond all rhyme and reason. It has no mechanism to extinguish debt. It pretends that transferring debt to the banks, and ultimately to the government, is tantamount to extinguishing it. However, the truth of the matter is that only gold circulation is able to extinguish debt. When it is stopped in its tracks, as it is under conditions of backwardation, debt explodes. [Italics in original]

Fekete's theories have attracted global attention since gold started backwardising in early December.  That's the first time such a situation has occurred since the early 1930s by some accounts, let alone lasted for more than 24 hours.  As The Australian columnist Robin Bromby put it:

It wasn't just the internet sites. London's Daily Telegraph was reporting the gold markets being in turmoil, with traders saying it was extremely hard to buy physical metal in the form of coins or bars, a problem the paper attributed to the emergence of backwardation.

Fekete said the development showed a drastic drop in the velocity of gold circulation and was a repeat of the situation in 1931 when, in the face of serial devaluations started by the British, gold circulation seized up. And we all know what happened after 1931 -- 1932, the worst year of the Great Depression.

It's not like Fekete hasn't been predicting this for a while.  In June - before the peak crude price and long before the credit meltdown - Fekete forecast gold backwardation.

There are plenty of people around who will tell you what everyone else says.  Sometimes it's the ones who go against the grain who are worthy of more attention than they get.  Sometimes they are a bit more clued in that people forecasting more of the same. 

-srbp-

Separated at birth: the tag line version

"Never give up.  Never give in."

"Never give up.  Never surrender."

-srbp-

13 December 2008

Forget TORSTAR: Latest Harper/Ignatieff poll results

Plus other stuff of equal importance, because politics is such serious business.

-srbp-

Purple Reign of Darkness

Danny Williams receives personal files on reporters who interview him.

He confirmed that fact, telling reporters the files are to help him prepare for those interviews.

"When I am provided with a personal file it's an information file to get me ready for an interview with the press," he told reporters at the news conference. "It is not the down and dirty on you or you or you or anybody else."

The Telegram learned of the files last December when one of its reporters received a government e-mail by mistake that asked a political staffer to prepare "purple files on both" that reporter and another who had also requested an interview with the Premier.

Not for both, as in for the interviews, but on both, clearly implying the files were to be prepared on the reporters.

Briefing notes and talking points are routine material prepared for interviews.  They include background information, suggested responses to questions and other similar information that focuses on the subject matter of the interview.

They typically don't focus on the reporter personally, unless the reporter has been following a particular - usually contentious -  issue for a while and hence has an understanding or interpretation of an issue that's already established. Even then, the clippings are only useful to get a perspective on how the issue has been approached, not on the reporter personally.

In the Telegram case, the interviews were for year-end wrap-ups. 

"A reporter basically came in the room one day and saw a purple file on the desk and assumed it was a purple file about that reporter... absolutely untrue," Williams said. "That insinuation, I've got to tell you, is really offensive."

What insinuation, you may ask?

As usual it's Williams who provided the sinister cast to the whole episode.  He suggested that the request by the Telegram for those purple files under the province's open records laws was based on the belief that the files contained personal profiles of the reporters.

The Telegram just went looking for the files, without specifying the contents.

The official response from the premier's department said that there were "no responsive records" meaning they had no such information or files.

Clearly that wasn't true, as the Premier admitted last week and as the Premier's communications director had already admitted to the Telegram via e-mail months ago.

Telegram editor Russell Wangersky focuses on this issue for his Saturday column, recounting much of what is presented above. He takes the cue from the notion of offensive to raise another point:

As offensive, say, as collecting files on political rivals to trot out in Question Period? "When the member opposite was minister, she bought two cases of wine." That sort of thing?

Indeed.

Nor hardly surprising from a politician who likes to talk about the amount of energy he spends on people who criticize his regime.

Or one who likes to call reporters to bitch about their columns and articles.  Like in this case where Williams called a reporter involved in the purple files controversy to complain that the reporter had appealed the case to the province's information commissioner.

Or a guy who calls ordinary citizens about their letters to the editor.

Politically, Danny Williams is in yet another hard spot on the subject of transparency and accountability, let alone free speech.

He likes to pat himself on the back for his supposed commitment to the virtues of open government, but whenever push comes to shove, his first response is to shove back hard and slam the doors shut on disclosure.

In this case, Williams' office has been caught both compiling personal files on reporters as interview preparation material.  Then his department has been caught denying the files exist, at least as far as the province's open records laws.  And let's be absolutely clear, under those laws, the contents of those files - irrespective of the colour of the folder - is accessible.

Now Williams' himself has compounded the problem by insisting on hiding the files he himself acknowledges exist based not on anything other than his own self-righteous indignation.

He will surely understand that a great many people are highly suspicious of his actions.

This is just the latest in a long string of secrecy issues for the Williams administration:

  • A couple of weeks ago, the Telegram revealed the extent to which the premier's department - Executive Council - controls what is released to the public under the open records laws.
  • Before that, we had the spectacle of the Premier making up excuses to keep the auditor general from reviewing files on a controversial business deal between the government and company's run or managed by his former business partners.  He subsequently relented, using the same discretionary power that many pointed out from the beginning that he held.
  • Then there was a health facilities report, which the government sat on for three years until the health minister accidentally revealed confirmed it existed.
  • And let's not forget the changes to the provincially- owned energy corporation's legislation that, in effect, shield the entire company from public scrutiny and limit the auditor general's ability to review the company's finances. Incidentally, that energy company unveiled its value statement this week alongside its grossly overpriced logo:  Accountability - Holding ourselves responsible for our actions and performance.  Yes, if you take the plain English meaning of those words, a public owned company will be accountable to nothing but itself.
  • Then there are changes this week to the province's public records management laws.  Under the old approach public records were managed by a committee of public servants. There were only public records and that included cabinet ones. Under the new approach, the government is creating a special category of files called cabinet records that it alone defines and controls. Watch out for an up-tick in shredder activity.

In this case, as in all the other cases, including the numerous reports the administration sits on in spite of the pledge to release them within 30 days of being received, the Premier and his staff deliberately fight any attempt at disclosure.  They kick and scream when - if things are really as innocuous as they claim - the simplest thing to do would be to release the documents.

Russell Wangersky makes an eminently sensible point in that respect.

But when a politician and his staff try to conceal things - as they obviously are - and when other public servants make false statements - there are responsive records in this case - you have to wonder what they are trying to hide.

You don't have to wonder why they try to hide things:  the administration has demonstrated repeatedly it does not believe in openness, transparency and accountability. 

If it did, people within it - including the Premier himself - wouldn't spend so much time trying to hide things from the public.

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11 December 2008

Fun with anagrams

Anagrams.

Take a word or words and mix up the letters to make new words or phrases.

Like, say, NALCOR ENERGY, the provincial government's new name for its old idea of state involvement in things best left to the entrepreneurial private sector.

Flip around the letters and you get, among others:

  • General Crony
  • Enlarge Crony

Add the letters corp on the end and you can end up with some other odd phrases:

  • Cancer Prone Glory
  • Clean Crony Groper
  • Porn Recycle Groan

Those samples came from an online anagram generator.  Maybe the human brain can do something more creative than create random words.

For example, this all started with an e-mail that asserted that one anagram for NALCOR ENERGY CORPORATION was CRONY CAREER PROLONGATION.

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NALCO Reborn

If nothing else, the current provincial administration is good at naming  - branding - things.

Well  that is, if by "good" you mean willing to make some completely unimaginative or even risible choices.

The risible included a new provincial government logo, erroneously called a brand, which consisted of three flowers of a lazy carnivorous plant billed as symbolic of the proud people of Newfoundland and Labrador.

The latest example of a decided lack of imagination appeared on Thursday with the name of the holding company for the provincial government's energy corporation.

NALCOR.

As in Newfoundland and Labrador Corporation, the name of another Crown corporation in local history that went by  the acronym NALCO.

Created as a Crown corporation in 1951 by Joe Smallwood's first administration, NALCO held rights to all the province's undeveloped land resources.  As a Crown corporation at the time, the thing was exempt from federal taxation.

NALCO grew from the brain of Alfred Valdmanis, the Latvian economist with a dubious past who ingratiated himself with Smallwood with plans of turning Newfoundland and Labrador into a modern industrial powerhouse.  He had the odd habit of referring to Smallwood as "my premier", in much the same way as Germans referred to Hitler as "my Leader", a point not lost on Smallwood's critics.

By 1954, NALCO was in the hands of John C. Doyle and Canadian Javelin.

The new NALCO, with a R added to the end, is the parent of Newfoundland and Labrador Hydro, Churchill Falls Labrador Corporation (CFLCo), the unimaginatively named Oil and Gas Corporation and may well become the parent of others under the legislation that gave it life.

Interesting that CFLCo is now known as Churchill Falls.  The entry in the registry of corporatrions for the province shows, as of mid afternoon on Thursday that the registered name is still Churchill Falls (Labrador) Corporation and that the company last filed a return in may 2007.  It isn't in good standing, according to the online registry record, meaning the CF or CFLCo or whatever it will be called now hasn't paid its annual registration fee.

The new company name hasn't been registered yet.  Instead - as of last Thursday -  Newfoundland and Labrador Hydro has reserved the name "NALCOR Energy Oil and Gas Inc". They have less than a year to get the thing properly registered.

The web domain  - nalcorenergy.com - was registered in November, though, by M5i, a division of M5, a local  marketing communications firm. They also registered "nalco.ca" at the same time.  Craig Tucker, one of M5's senior executives, was a Williams administration appointee to the Newfoundland and Labrador Hydro board of directors.

-srbp-

Facing oblivion

From the guy the insiders picked to run the Liberal Party:

I’m not looking for a road to 24 Sussex. I'm looking for a road that takes us out of crisis towards a stable, responsible government with the national interest in mind. Mr. Harper has to understand the extent and depth of the anger -- the justified and righteous anger among the opposition parties at the way we've been treated in this Parliament. He seems to misunderstand the very nature of Parliamentary government, and he better start understanding quickly

The political problem facing Canada, as Michael Ignatieff now states it,  is not that Stephen Harper is running the country but rather that he isn't running it properly.

According to Mr. Ignatieff, Stephen Harper simply needs to listen a bit, to "understand".

So why exactly is the new Liberal leader looking for volunteers, ideas and  - what was that other thing? oh yeah  - money out of your pocket to accomplish this goal?

Not clear.

Not clear at all, especially considering that Mr. Ignatieff states flatly that he is not looking for a road to power.

He defines the goal here in a way that does not mean - as a matter of simple fact - that the only possible "stable, responsible government with the national interest in mind" the Liberal Party backs is a Liberal government.

The Prime Minister doesn't have to do very much of anything to hang on to power in that scenario.  He can just remind everyone that he has already moved on the major irritants that caused the proroguing kerfuffle.

Things should be peachy in Ottawa over the holidays. Mark your cards right now that there is no way the Liberal caucus in Ottawa will continue with the coalition and bring down the government. The Conservatives know they have the government firmly in their grip and with Michael Ignatieff safely fronting the Liberals, they know nothing will threaten that in the near future.

This would be pretty much what your humble e-scribbler concluded days ago.

In fact, there really isn't very much of anything that Mr. Harper could do to compel the Liberal insiders who picked this guy to run the party to bring him down and force an election.

If you thought that the old Liberal caucus was feverishly trying avoid an election, just wait 'til you see this crowd. If you want to clear out the Liberal caucus room next year just walk into the place and yell "division!" They'll be out the door and headed down the 416 faster before the "n" leaves your lips.

That's because the Liberal Party under Michael Ignatieff will be too busy looking for the road that takes you away from the centre of national political power in this country.

Sure, they will be looking for people to join a conversation, as Mr. Ignatieff puts it on his blog.  All very much the look and feel of what someone thinks a political bloggy thingy is supposed to look like.

And yes, Mr. Ignatieff does practice the Dale Carnegie crapperific approach to speechifying.  Mention people by their first name a lot and you can imitate what a politician is supposed to sound like, at least to some people's way of thinking.

What you don't get, though, is what a leader and a political party is supposed to act like, what is supposed to be.

You don't get people looking for the road to 24 Sussex.

That's where power is and if the political party isn't lead by a guy looking for that goal, he isn't facing the future.

He's facing oblivion.

-srbp-

10 December 2008

True or false

One of these statements is true.

The other is not.

The only question is which one is which.

Natural resources minister Kathy Dunderdale, in the House of Assembly, December 2, 2008:

IOC informed me on Friday morning, Mr. Speaker, that they were going to delay Phase 1 and Phase 2 of their expansion program,...

Natural resources minister Kathy Dunderdale, in the House of Assembly, December 10, 2008:

I have met with Terry Bowles, the CEO for IOC, within the last six weeks. I have had a number of telephone conversations with him, Mr. Speaker. I will have another one today. The last communications we had around this piece, which I reported in the House, was that they were going to complete the work that was already started in Phase I and Phase II of their expansion but otherwise, plans were on hold.

Interestingly enough this is not the first time in the House, in December, that Kathy Dunderdale said two completely contradictory things about exactly the same subject.

Anyone remember Joan Cleary?

The government suddenly closed a short session of the House in 2006 when Dunderdale was caught at this sort of misstatement.

-srbp-

And a week later everywhere else...

IOCC ices expansion plans.

December 2 at Bond Papers, thanks to Kathy Dunderdale's loose lips in the House.

December 10 everywhere else.

It's not like the conventional media don't cover the legislature.

-srbp-

The economics of Snuffleupagus

Funny thing how people miss stuff.

Like a Bank of Montreal economist who offered this view of the provincial financial state:

"The commodity boom has lined the province's coffers," he said. "Meantime, a reversal in migration flows has sprung population growth back into positive territory after three years of outright declines - an important development given that a lack of skilled labour could be a constraint on the province as offshore development picks up speed and major construction projects come online."

If "lining the coffers" means supported spending way beyond what is sustainable then he's right, but look at that migration comment.

You'll see similar views coming from the provincial government, not surprisingly.  There's lots of talk about the growing population as another sign that the fiscal messiahs are now in charge and that their "plan" is working.

That would be the plan, by the way, that Barack Obama is following.  No, gentle reader, that isn't some effort at humour.  It's a real quote and yes, he believes every word of it.  That's just how brilliant this crowd are.  This plan  - which consists of nothing more grand than spending everything that comes in through the door - must come from all those books, well not books really but articles and magazines the Premier reads 24/7 on a go forward basis to try and keep track of what's going on out there.  

But we digress.

This migration thing.

Three years, eh.

Only goes to show how much these bank economists don't know.

popchange_thumb The outmigration problem - and net population decline - goes back to the cod moratorium of the early 1990s. 

It hit some new records in the best years of Danny Williams economic miracle.  That's right.  At a time when the economic miracle was taking hold people were flooding out of the Happy Province in near record numbers. The chart at left gives an idea of how big the problem has been.

There are parts of the province that are almost entirely dependent on migrant labour and remittance workers.

In others - like Stephenville - the economic disaster of losing a pulp and paper mill on the Premier's watch didn't materialize solely because the workers there could find jobs in Alberta.

But yes, you say, there has been more people coming back to the province since 2007, you say.

And yes, that's true, but it isn't because of great economic opportunities in this province.  Look around, especially outside the overpass.  All those enormous, job-creating projects that were supposedly luring people back don't actually exist.

Even though he mentioned them in his financial statement, finance minister Jerome Kennedy told CBC Radio this morning that - in fact - the big projects that supposedly exist to keep the fire going in the economy, stuff like the Lower Churchill, don't actually exist right at the moment.  These are projects Kennedy and his boss are "trying to get money for", according to his own words.

People started coming back to Newfoundland and Labrador, just as they have done previously, in advance of a major downturn in Ontario and Alberta.  Only the stupid came back for jobs that - as Jerome Kennedy knows - don't exist.  The housing boom in St. John's is driven largely by the movement of people within the province toward St. John's where there is at least the chance of decent work. The open taps on those public coffers don't hurt either. You'll find detailed discussions of the whole population thing over at labradore.

It really is funny how people miss stuff. Really obvious stuff that is readily available in the public domain.  People who - presumably - actually keep track of these things like bird-watchers scanning the trees for this winged thing or that.

Evidently not.

Evidently, great big yellow birds get missed a lot.

Aloysius Snuffleupagus would understand.

-srbp-

09 December 2008

An accountability problem for Jerome

Aside from being one of the most arrogant and condescending finance ministers in a long time, Jerome Kennedy might need to brush up on his math a bit.

Here's a sample of the arrogant and condescending finance minister in action first:

It is important, and whether or not the – I understand that the Leader of the Opposition does not understand. Nor would I necessarily expect her to. The reality is that this is not artificial spending here. We are not borrowing to spend on infrastructure. We are taking $1 billion and putting into infrastructure.

Everyday Jerome is on his feet there's at least one of those sort of slimy comments. Totally unnecessary, but he makes them every day.  Too bad there's no one like Antonio around to teach the poor fellow some manners.

But that's not the problem.

Here's the problem:

In Question Period, Jerome revealed that the province's unfunded pension liabilities have grown, according to the finance minister, by $1.5 billion as a result of the downturn in the world economy.  Here's what he told the House:

As the Leader of the Opposition is aware, in 2006 we paid $1.953 billion into the Teachers’ Pension Plan, and a further $982 million into the Public Service Pension Plan 2007, trying to bring these pension plans up to the funding levels of 80 per cent to 85 per cent, which is suggested.

The recent downturn in the economy and what has happened, Mr. Speaker, has resulted in approximately, right now, a shortfall of $1.5 billion in terms of our pension funds. That is not unexpected in light of everything that has gone on, and some of the figures I think I gave last night in terms of losses by the banks.

One figure, though, that becomes important, Mr. Speaker, although we have decreased our debt servicing charges by approximately $200 million, there could be a result in the pension cost next year of an extra $180 million.

That last figure is only somewhat important.

It is only important to the extent that in his financial statement on Tuesday Jerome patted himself on the back for reducing the debt servicing charges.

In the House, he revealed that - all things considered - those charges will grow by roughly the same amount as the decrease this year.  That is important considering that expenditures are going up while revenue is going down.  Not a good position.

But look again at the front end and the middle bit of that quote because that's where the big problem comes in.

The $1.9 billion is the Accord 2005 money received in a lump in 2005 and already spent.  The $982 million - if memory serves - was borrowed.

But all that doesn't matter since the pension fund has lost $1.5 billion in value in the space of a few months.  Apparently those shopping malls mortgaged in Ontario and British Columbia to Great-West Life, among others, aren't pulling in the expected bucks.

The inconsistencies among Jerome's comments at different times gives the old boy a basic problem:  an accountability problem.  He just can't seem to give a straight account of the province's financial state.

That's a pretty bad thing for a finance minister because if anyone needs to be able to keep his accounts straight,  it would be him.

Bottom line?

We won't know the real financial position of the province until sometime after March 31, 2009 and even then we'll likely have to take Jerome's words with a grain of salt.

-srbp-

The Last King of Chicago

From the Canadian Press:

“You know what I like the most is Barack Obama is listening to what we're doing here,” Mr. Williams said during question period to roars of applause from his Conservative caucus.

“That's a great compliment to this province because I have a lot of respect for that person.”

Here's the rest of it from Hansard:

Premier Williams:...Obama outlines initiatives to create 2.5 million jobs; make public buildings more efficient; repair roads and bridges; modernize schools; increase broadband access –

Some Hon Members: Oh, oh!

Mr. Speaker: Order, please!

Premier Williams: He will do it right because we did it right and he can have our (inaudible) any day of the week.

You just cannot make this stuff up.

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Poll goosing harder than ever

CRA The provincial government's pollster released the results of its most recent work on Tuesday. The graph with the orange line shows the party support numbers for the Provincial Conservatives for the past year and a bit as reported by Corporate Research Associates.

Interestingly enough the polling period included a bunch of hype at the front end about aluminum smelters in Labrador in addition to the usual poll goosing goodies.

The Premier rushed out the story of "Have" province status a couple of days before the surveying started.  There was more than a bit of media coverage for that and the associated video and the great party he was planning.

Of course, he knew at the time that the province might opt for the O'Brien Equalization formula and thereby become a "have Not" province again before the fiscal year was out, but that never stood in the way of a good goose.

Odd that he rushed that story out there wasn't it?  Almost like he knew the pollster was about to start calling people.

The polling period cut off before AbitibiBowater made its announcement.

In any event, it's interest to look at the party support numbers, adjusted as a percentage of all respondents.

That's very different from giving it as a percentage of decideds.  That number fluctuates a bit.  When you report as a percentage of decideds you inflate the apparent level of support for one option or another.  Like in this case:  the Provincial Conservatives have these wildly stratospheric numbers which feed into the myth of political infallibility and invincibility.

real provincial conservativeSo hang on a second now.  In the blue graph, we have the same figures adjusted to take into account the undecideds. 

You still wind up with the climb at the front and the drop in the past quarter.  In between, though, you don't have the same steady state.  Instead you get a gradual decline.

But then there's that bit at the end.  A drop of 11 points since this time last year, six of which came in the past three months. That's an oil-price-like decline.

The numbers themselves aren't all that stratospheric.  In fact,  one suspects that people might have an easier time accepting the blue numbers these days given the state of the economy and the recent troubles in public sector bargaining.

Either way there's a precipitous decline over the last quarter that is surely causing a few people to sit up and take notice.  Consider the amount of fairly obviously orchestrated poll goosing that went on - including the smelter and the "Have" province crap - all of which still added up to a decline.

Now given the huge gap between the Conservatives and the other two parties, it's not like people around here are going to start seizing airports or anything.  They aren't migrating across the border to find water and medical care. 

Still, though, if local media are going to report poll results - even as sparsely as some did on Tuesday - they should apply a little analysis.  Episodes like the "Have province" should be put in a context that is, to be brutally frank about it, so damned obvious after four years of relentless poll goosing that it's pretty hard to miss it.

The government may have put has happy a face on the financial situation as possible but it certainly looks like something is changing in the political landscape.  Let's see what the next couple of quarters bring.

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The provincial budget update: six points

1.   The long and short of it:  Some revenues are higher than projected.  Spending  remains the same.  The update runs six pages.  Four of them are devoted to a rehash of things we already know and a heck of a low of stroking for supposed prudent fiscal management.  What’s left is pretty thin, at least for anyone who wants to get a handle on.


2.   Missing revenue numbers:  Interestingly the provincial government only mentioned three specific revenue sources which are performing above budget estimates from last spring. Unmentioned was revenue from mineral revenues other than oil.  Last year it was big enough to warrant a mention.  This year:  zip.  Either mineral revenues are on par or down or the government is saving that for the spring to offset some bad news.

3. The political value of lowballing:  Underestimating revenues and overestimating costs is an old trick to make your budget performance look better than it really is.  This year – for the first time in three years – the provincial government’s practice of lowballing oil revenues didn’t really work out as planned.

In prior years they could forecast deficit spending and be reasonably assured oil would perform beyond the expectations.  At the end of the year planned borrowing was replaced with cash spending.  That’s how deficits never really appeared.  It’s also how the Premier could keep claiming that surpluses were being directed to debt reduction and that – as this update claims – there is a magical plan at work which delivers even in relatively bad times.  The faithful sop it up They even go so far as to claim the Premier can’t be blamed for the downturn even though they give him all the credit for the cash rolling in when it rolled in. 

This update gives an excellent example of how to inflate performance by lowballing.  There’s $70 million missing from the spring budget projection for oil royalties.

Okay.  He can’t.  But he also can’t claim the credit for the great times in the past couple of years since he didn’t deliver those either.  The faithful can be spotted by the purple freshie stains on the corners of their mouths.

4.  The extras cash revenues (corrected):   Note that the budget update gives the budget estimate for oil royalties $70 million below the actual number from the Estimates.

 Forecast

Revised forecast

Difference

Oil Royalties

$1.789 billion

$2.202 billion

$413 million

Personal income tax

$674.8 million

$831.8 million

$157 million

Sales tax

$631.589 million

$664.589 million

$33 million

Total variance

$603 million
5.  Surplus or deficit?  This all goes back to an issue raised here last September. Given that the accrual surplus is now revised to be $722 million higher than forecast, there are a few bucks missing from the update.  Even at $722 million in additional revenue, the budget would still be short on a cash basis by $72 million.  Given recent practices, and given that this year there are no anticipated savings through spending cuts, the cash deficit could easily run to upwards of $200 million by the year end.
6.   Prophetic words from last June: 
In order to produce a surplus of the size predicted  - but predicted only in political statements - oil prices would have to continue at double the figure of  $87 a barrel used to come up with the budget.  So far, it looks pretty good for oil to be somewhere over $130 on through the end of this year, but you never know what will happen with oil prices, especially after the American elections in November and the new president is sworn in late in January 2009.
Okay, so at the time, it looked like oil was going to stay high.  And in making the comments, your humble e-scribbler was also pointing to the difference between an accrual surplus – including cash that really isn’t there – and the cash situation which might under certain circumstances require new public debt to make things balance.
The key point, though, is that you never know with oil prices.  Shortly after that post, oil peaked at $147;  incidentally that’s not $145 or $150 as reported in a couple of spots in the news release and update document issued by the provincial finance minister today.  As it turned out, oil prices started falling in late summer and with the credit crunch, the drop accelerated. In the end the provincial government can report an accrual surplus that looks amazing but on a cash basis, they’ll likely wind up having to borrow cash to settle all the accounts.
-srbp-

08 December 2008

Locking the barn door: prisons report version

The provincial justice minister released a report on Monday into the provincial prison system.

The hard copies handed out to reporters had sections blacked-out for various reasons. Those copies made it impossible to see the words that were redacted, to use the popular phrase.

The electronic version wasn't quite as effective.

Somehow, the blacked-out bits of the pdf didn't really remove the words. They merely masked them. As CBC discovered, if you copy the text and then paste it into any simple word processing software - like say Notepad - the words covered by the black boxes magically appear.

The original electronic version was available until after lunch. It's now been replaced by a version that has puts bits of punctuation in place of the excised words if you block copy the bits including the black redacted strips.

Never fear.

CBC has posted a copy of the report as it originally appeared so people can get the originally released version.

Inferring from context, it is possible to see in some instances that the excised sections of the report deal with security in the prisons.

Others are odd.

Like this bit from the second version released by the justice department:

One of the persons interviewed stated ------------------------------------------------------
------------------------------------------------------------------------------------, spoke of the
atmosphere of mistrust and stated that “the environment is such that you have to be
careful who you tell things to.” Several times during the Panel’s interviews with --
---------------------------- referenced what -- perceived to be the lack of support from
“the hill”, noting that he had files of documentation that would support --- claim.

Look at that last bit: "...referenced what -- perceived to be the lack of support from 'the hill', noting that he had files of documentation that would support --- claim."

"What [blank] perceived" and "would support [blank] claim" suggest that the words chopped here somehow make reference to an individual. Under section 30 of the province's access to information law, government can't disclose information on particular individuals in certain circumstances.

Now, we've seen already bizarre examples of how the government secrecy apparatus - D.B.A. "access co-ordinators" - interprets this section. Documents summarizing information already in the public domain were edited to exclude the name of a judge involved in a trial, for example. Information about public servants acting in their capacity as public servants are to be left in but people who aren't public servants are omitted.

This became clear in testimony by Renee Pendergast at the Cameron Inquiry on the issue. Pendergast is no average bureaucrat. At the time of the issues under review by madam Justice Margaret Cameron, Pendergast was the access co-ordinator for Executive Council. She's since returned to her usual job vetting access requests for the department of justice's access co-ordination section.

COFFEY , Q.C.: After the matter passed through - - while the matter was passing through your office , his name was redacted in relation to - - in a briefing note , a government briefing note referring to the fact that some matter was ... this particular matter was before him and the status of it at the time , and his name was redacted. Could you tell the Commissioner, please , what the rationale is that would have someone like Judge Thompson's name redacted in these circumstances from a Cabinet briefing note?

MS. PENDERGAST: And I realized that that name was done when we had done our pre - interview , and I can assure Madam Commissioner that that was done in error. His name would have been left in. I'm assuming it was because I really did not know who he was at that time , and I redacted it under those circumstances , but under normal circumstances , if I had realized who he was , his name would have been left in.

COFFEY , Q.C.: Can we actually bring up - -

THE COMMISSIONER : I'm sorry , did I misunderstand what you said earlier. I thought you were saying that even though it might seem frankly silly to some of the rest of us , your interpretation of the legislation was that if the information contained a name which was other than a civil servant presumably conducting their business , that would be deleted. So why wouldn't Justice...

MS. PENDERGAST: Because , I guess , we considered him for him to be a Judge at this point , and his name would be allowed to be left in. He wouldn't be considered to be a - - like , would he be affiliated - - and I'm not sure if he's a provincial judge or - -

THE COMMISSIONER : No , and believe me , he would not consider himself to be affiliated with the Department of Justice.

MS. PENDERGAST: . Yeah , yeah , so - - and I don't know that. That's the reason why chances were his name was released - - was withheld.

COFFEY , Q.C.: And just in relation to that because that was the way when Ms. Brazil was asking about it , you did indicate that , well , if the vetter as it were , in your position - -

MS. PENDERGAST: Uh - hm.

COFFEY , Q.C.: did not understand that a particular name was that of a civil servant , then the name went?

MS. PENDERGAST: And we would double check some of them if we weren't sure , absolutely.

COFFEY , Q.C.: But - - that's the criteria , if it's not a civil servant - -

MS. PENDERGAST: It's withheld.

COFFEY , Q.C. : 23 Q. Withheld.

Okay.

So in the section from the prisons report, this particular individual or individuals covered by the excised portion would be public servants speaking in their capacity as public servants.

Odd that their views are removed - odder still that it's only in part - and in that last sentence the clipping relates words that function as the subject of the verbs involved are also plucked out.

Maybe they were proper names, one might think, as in "Mr. Jones perceived" and "Mr. Jones' claim". If that was the case, then the word "he" that appears in between ought to have be chopped as well since that word also tends to identify the gender of the informant.

Read the CBC version using the Microsoft magic decoder and you discover that no proper names appear at all.

There's another head-scratcher in another section that deals with concerns among prisons staff about the lack of appropriate recognition given to a staff rowing team. The excised bit is completely mystifying since it contains no information on the security of the prison system, does not tend to identify third parties - i.e. people who aren't public servants - and generally just carries on the narrative of the issue which is left in. If problems with morale and the causes of said problems or irritants related to it are left in the document, it makes one wonder by what truly insane line of reasoning the excised bits were chopped.

Now the prisons report has more than enough in the public versions to give people cause for concern. The redaction weirdness comes - unfortunately for the current administration - at a time when their are renewed questions about its commitment to openness and transparency. They talked a good game while in opposition but, as the Cameron Inquiry and a recent set of articles in The Telegram show, the actual performance falls far short of the mark.

Some of the access problems may well have to do with bureaucratic inertia. Your humble e-scribbler has been lied to by one access official. In another case, in response to a simple request sent to obtain information in exactly the manner described by the government's own policy statements - low cost and informal - your humble scribe met with the request being shunted to the access co-ordinator who, in turn insisted that the request had to be made on the appropriate form and would be dealt with only after the appropriate fees had changed hands. That isn't government policy but the co-ordinator knowingly insisted on it merely as a means of frustrating a simple request.

In largest part though, one is tempted to point to the tone at the top as being the culprit. Public servants do not like to disclose information, as a rule. They like to find ways to hold things secret. That's a characteristic of bureaucracies the world over since the people in the bureaucracies know that information is power.

They are encouraged in the zeal for secrecy by episodes like the one in a tussle between the auditor general and the Premier over access to cabinet documents related to the cable deal. The Premier invented excuses to avoid disclosing the documents to the person he appointed to review the affair. He then relented, admitting in the process in effect that his earlier excuses were lacking in substance. later still, we saw the changes to the access to information that would - in effect - block members of the public finding out how much toilet paper the province's energy corporation buys at any given time let alone what contracts it enters into.

In the prisons report case, the government censors wound up locking the door long after the information horse had bolted. Nevertheless, their cock-up does give some insight into how the system works. Looking at the redacted version and the inadvertently unexpurgated copy of the report, one cannot see any obvious, legitimate reason for withholding any of the bits that were excised. If anything, the bits hidden under the black bands reinforce the points made throughout the report and left there for the public to see.

They were cut, though and the people of the province weren't supposed to see them.

You have to wonder why the decisions were made to chop those bits in the first place.

And if this is the sort of stuff they deem unworthy of telling you, you really have to wonder what else they are keeping secret.

-srbp-

Michael Ignatieff: the "Whips and chains and cuffs, oh my!" version

Heard from the kinky corner recently:

"While I support torture on a personal level, I am not sure it makes good national policy."

-srbp-

The powers that be

1.  Congratulations on your new budget, Mr. Harper.  Michael Ignatieff never supported the coalition. 

Period.

He never did.

He never will.

With Ignatieff as Liberal leader, the coalition is now dead as a doornail and Stephen Harper has a green light to rule.

Your humble e-scribbler heard Ignatieff speak in St. John's the week the coalition appeared. He could not have damned it more if he had opposed it flatly and in plain English.

Too shrewd a politician, he waited to declare his concerns until after the coalition failed and he had put the conditions in place to take the leadership. [Think about it for a second.  This is a guy whose spinners  claim he has the support of 55 of the 77 member Liberal caucus.]

As it stands, Michael Ignatieff will be the best friend Stephen Harper ever had, at least in the short term.  Harper will get his second kick at the cat in January without a problem.

The Connies are already opening the champagne.  They know Ignatieff's weaknesses and they can watch his manoeuvering and understand him for exactly what he is.

They know him because they have one of their own.

At least one.

They took their first shot at him on Monday.  Expect more of it.  It won't get any better.

The Liberal Party did not send Bob Stanfield to defeat Bob Stanfield.

Think about it.

2. Congratulations on your long second term of office, Mr. Harper.  The Liberal Party is not ready for an election and will not be ready at any time in the next two years.  It needs fundamental reform at the policy level and especially at the financial level.

Those things will take longer to put in place than a handful of months and on the financial side, the reform and re-organization will take longer to implement and take firm hold.

Stephen Harper is safe in office for the balance of 2009 and likely well into 2010.  His entourage may well take the party to war before that but they run the risk of crashing against some pretty hard rocks.

3. They are called the backroom boys for a reason. The backrooms line up for a candidate.  That pretty much sums up the view of the party about things like new ideas and new people. 

Take a look in Newfoundland and Labrador.

Multiply that by 10 provinces.

You get the point.

-srbp-