The Year of Living Dubiously #nlpoli

Conflict of interest is great thing to deal when there is a chance of stopping it or dealing with it, not six or seven years later.

Back in 2006, conflict of interest was all the rage.

Noting the problems with conflict of interest wasn’t.

Do we have it? #nlpoli

Kathy Dunderdale had a pretty easy audience on Monday for her relaxed, ambling speech about a whole bunch of stuff.

It was the St. John’s Board of Trade. 

As a rule, the townie business community have the guts of political guppies.  They’ll run along with whatever the government says and Monday was no different.  When the Conservatives were spending and spending beyond what the province could afford, the crowd at the Board of Trade cheered wildly.  And now on cue they are repeating the Conservative line on spending restraint – when there really isn’t any – and the glories of Muskrat Falls, which is the proof the government is continuing to spend beyond the public’s means.

The crowd at the aptly named BOT know what side their bread is buttered on so they applauded in all the right spots in the Premier’s stock speech.

Well, almost stock.

Beth and Expenses #nlpoli #cdnpoli

All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.

Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish.  She was barred from the House by the legislature’s internal economy commission.  The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.

But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go.  While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.

That’s important because of Marshall’s record once she got into the House herself as a member in 2003.

The Transformation #nlpoli

Provincial Conservatives in Newfoundland and Labrador have a political philosophy that is equal parts Machiavelli,  Kafka, and the Three Stooges.

For the first few years they seemed to be constantly plotting and manoevring, always one step ahead of their opponents at home and abroad. 

Those days are gone, now, replaced by a surreal landscape of bizarre shapes and hideous shadows.

The Conservatives have already admitted to their continuing financial mismanagement of the province.  They admitted in 2009 that what they spend of the public’s money every year is unsustainable. They continue to spend like that even though the public cannot afford it.

Yet these same profligates attack their political enemies with the accusations that the opponents are financially irresponsible.  These same bankrupts defend recent cuts to education by pointing to their previous spending which they have admitted is unaffordable and which is the reason for the cuts.  They censor public documents and at one and the same time, crown themselves most open government the province has ever seen.

This heady mixture now comes to slapstick comedy, courtesy of Trevor Taylor.

Responsible Public Spending #nlpoli

You don’t need drugs or alcohol to get the feeling of dizziness or stupor like you smacked your head with a hammer. Hard. Repeatedly.

Just listen to a representative of one of the special interest groups talking about the provincial budget and public spending. It doesn’t matter which one.  As your humble e-scribbler was finishing off this post on Tuesday, a representative of the appropriately named St. John’s BOT was on television talking about how government had to cut public sector jobs and tear into public sector pension benefits because of the hideous unfunded pension liability. 

Corporate lawyer Denis Mahoney even quoted the distorted, misleading government claim about the unfunded liability as a share of only a fraction of the public debt to bolster his position. He never mentioned the billions going to subsidize his members, of course. 

In the process, Mahoney looked about as convincing as the labour mouthpieces like the Canadian Centre for Policy Alternatives who said in 2004 that the government wasn’t spending too much.  It just didn’t have enough money.  Of course, they never mentioned that the government was outspending just about every other province on a per capita basis.

Listen to this sort of mindless crap long enough and you don’t have to wonder why people wander around in a daze.

To clear your head, take a look at a chart showing the actual government spending from 2005 to 2012 (in blue) compared to the income from sources other than oil and minerals (in red).

House of Cards (Part B) #nlpoli

Continued from Part A

Terry Lynn Karl is the author of The paradox of plenty: oil booms and petro-states., one of the best known books on the resource curse or rentierism.  Karl described the essence of rentierism in an article she originally wrote in 2007 and revised in 2009:

Oil wealth produces greater spending on patronage that, in turn, weakens existing pressures for representation and accountability. In effect, popular acquiescence is achieved through the political distribution of rents. Oil states can buy political consensus, and their access to rents facilitates the cooptation of potential opponents or dissident voices. With basic needs met by an often generous welfare state, with the absence of taxation, and with little more than demands for quiescence and loyalty in return, populations tend to be politically inactive, relatively obedient and loyal and levels of protest remain low -- at least as long as the oil state can deliver.

In the extreme, oil wealth can disconnect a state from its population.  By the same token, oil can disconnect politicians from the population, transforming them from representatives who must satisfy voters in order to get re-elected to bosses controlling subordinates.

Rentierism at the national and sub-national level #nlpoli

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This is the third in a four part series on the current financial crisis the provincial government is facing.  The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday and the second – “Other People’s Money”  - appeared on Wednesday.

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A rentier is a person who lives off the income from property and investments.  That distinguishes a rentier from a person who earns income through labour.

For the past 40 years or so some political scientists and economists have studied something called a rentier state.  In simplest terms, a rentier state is one that derives a significant portion of its national government income from the money they get from oil and other high-value, but volatile commodities.  [FN 1]

For our purposes, we’ll rely on a definition of “significant portion” as being 40% or more of  government income.  [FN 2] We’ll also focus the discussion on states that derive most of their income from oil.

What we are talking about here goes by several names including  the Dutch Disease or even the resource curse.   Jeffrey Frankel of the Kennedy School of Government put it this way:

It has been observed for some decades that the possession of oil, natural gas, or other valuable mineral deposits or natural resources does not necessarily confer economic success. Many African countries such as Angola, Nigeria, Sudan, and the Congo are rich in oil, diamonds, or other minerals, and yet their peoples continue to experience low per capita income and low quality of life. Meanwhile, the East Asian economies Japan, Korea, Taiwan, Singapore and Hong Kong have achieved western-level standards of living despite being rocky islands (or peninsulas) with virtually no exportable natural resources. Auty (1993, 2001) is apparently the one who coined the phrase “natural resource curse” to describe this puzzling phenomenon. …

The Origins of Rentierism in Newfoundland and Labrador #nlpoli

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Over the next four days, SRBP will offer an interpretation of the political underpinnings of the current financial crisis.  This series goes beyond the immediate to place recent events in both historical and comparative, international perspective. 

The first two instalments briefly describe some characteristics of the political system and Newfoundland political history before 1934 and from 1949 to about 1990.  The third post will look at the concept of the rentier state and the relationship between dependence on primary resource extraction and politics at the subnational level (states and provinces).  The fourth post will place recent developments in Newfoundland and Labrador in the larger context. 

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Before 1949, the Newfoundland government’s main source of income was taxation of imports and exports.  The Amulree Commission reported, for example, that the government brought in around $8.0 million dollars in the fiscal year ending in 1933.  Of that, 71%  - $5.7 million  - came from customs and excise duties.  The next largest amount was $700,000 (about 9% of total) that came from income tax while the third largest source of income was postal and telegraph charges totalling slightly more than $587,000.

Newfoundland also had almost no experience of local government before the Commission Government in 1934.  St. John’s was the only incorporated municipality and the city council was quasi-independent of the national government. 

Beyond the capital city, the national government “managed a highly centralized system through the stipendiary magistrates stationed in each electoral district, “in the words of historian James Hiller in his recent note on the Trinity Bay controverted election trial in 1895(FN 1).  The central government also appointed the members of some local  boards to manage education and roads.  The money for all of it came from accounts controlled by St. John’s.

The members of the House of Assembly had enormous control over government and that public money.

A Celebration of Excellence #nlpoli

For the second day in a row, CBC Radio’s On the Go had a go at Frank Fagan, the newly appointed Lieutenant Governor of Newfoundland and Labrador.  Or as host Ted Blades described him on Tuesday, another old, white guy.

In Wednesday Blades decided to interview NDP leader Lorraine Michael.  Blades started out by asking if he had been right to bring “gender” into the discussion.

Michael responded by referring back to the Premier’s recent Ovations event.

There are at least a couple of things you can take out of the interview and the mini-flap that has erupted the Fagan appointment.

The New Sexism #nlpoli #cdnpoli

As the story goes, the crowd currently running this place were all set to issue a news release that the first woman premier in the province’s history was announcing the appointment of the first woman clerk of the House of Assembly.

Then someone quietly pointed out that another Premier had already done that.

In the 1970s.

Her name was Elizabeth Duff.

Too amazing to believe #nlpoli

Every day in Newfoundland and Labrador, the news is like some kind of perpetual, live edition of Ripley’s Believe it or Not. 

Here’s a sample of what your humble e-scribbler learned on a sick day:

Why would a member of parliament visit his own riding?  Only in Newfoundland.  Or in this case Labrador.

A mayor wants people with money to come to his city and invest it!  The truth is really stranger than fiction.

Politics in Newfoundland and Labrador involves lots of patronage.  Freaky, man, even if the CBC online story doesn’t actually give any kind of back story to it.

-srbp-

Verbiage Growth Strategy #nlpoli

Right on cue in the controversy over the population growth “strategy”,  a provincial cabinet minister issued a news release late on Monday and assured us that everything will be all right.

There is lots of bureaucratic jargon, like the trendy use of the word “inform”:

The Provincial Government has developed strategies focusing on youth, immigration, seniors and others. These efforts will help inform the development of the Population Growth Strategy.”

Aside from that, there’s very little of consequence in Joan Shea’s release. 

High-Value Delivery #nlpoli

Two cabinet ministers trekked up the Southern Shore on Wednesday to hand over a cheque for some government cash to a local group of seniors.

Of course, they dragged their political staff with them.

The value of the cheque was $2,000.

Oh for God’s sake, just get a room #nlpoli

If you want to read a strongly worded condemnation of a provincial politician, take a gander at the Telegram’s editorial on Yvonne Jones from Tuesday’s paper.

Jones told the provincial government last week that her vote in the House of Assembly on Muskrat Falls was up for sale. Word got around the province pretty quickly.  And the Telegram dutifully pointed out that Jones’ pork-barrelling was from another time, a time perhaps best left behind.

The editorial tuts the appropriate tuts at Jones’ style of retail politics, but there are a few other points the Telegram didn’t make about the episode that are worth laying out.

Kathy Dunderdale, give-aways, and the resource curse #nlpoli

Ontario has been interested in Gull Island since at least the 1990s.  We didn’t need Kathy Dunderdale to say that again as part of the advertising show she is mounting before finally admitting Muskrat Falls is a done deal.

As recently as 2005, Dunderdale and her friends turned up their noses at Ontario’s offer to help develop the Lower Churchill at no cost to local taxpayers.  The result: No development.

Instead of building the Lower Churchill for export  - profit for taxpayers -Dunderdale and her friends are forcing taxpayers to empty out their public bank accounts of billions in oil savings and then borrowing billions more in order to give cheap electricity to multi-billion dollar mining companies. Then those same taxpayers will pay themselves back through their electricity rates over the course of 50 years.

Whoever could imagine such a ridiculous idea?  Especially in a province where the overwhelming majority of the population pays very little, if any, tax.  

Another sign of the democratic deficit #nlpoli

If you have a few minutes to spare, flip through the provincial government’s 2012 budget.

Look for the work “donation”.

You won’t find it.  Nor will you find any amount of money set aside in the health department budget that would cover a donation by the provincial government to health care foundations operated in some communities on the west coast earlier this year.

The Return of the Public Accounts Committee #nlpoli

Supporters of the current governing party like to talk about how theirs is the most open, accountable and transparent government of all time.

Problem for them is that they cannot prove it.

Those of us who don’t believe that claim have a distinct advantage:  we can offer solid evidence about the the current lack of openness, accountability and transparency.

The Politics of Oil and Budgets #nlpoli

When any country or province depends heavily on the money that comes from resource extraction, it affects politics there.

Political scientist Michael Ross is probably the most recent author on the subject. Terry Karl has also written extensively on the resource curse.  She wrote of the best known books on the subject:  The paradox of plenty:  oil booms and petro-states.  You can also find some of Karl’s further thoughts on the issue in an article she wrote in 2007  and revised in 2009.

These studies focus on the developing world, for the most part, but what academics observe about those countries can cause you to think again about politics in other places.

Like say, Newfoundland and Labrador.

The tone at the top - federal version #nlpoli

Marni Soupcoff has got it right about the campaign finance scandal currently swirling around federal intergovernmental affairs minister Peter Penashue (pronounced Pen-ah-shoe-ay).  People should be concerned about the money Peter Penashue used to get elected:

The part that stands out is the involvement of a federal member of parliament who seems to have, in the absence of an ability to balance his own campaign books, used money that was meant for the Innu community to get himself elected. Not only has he has not been taken to task for this by his Conservative government. He remains a cabinet minister. Now that the media has discovered the loan and Mr. Penashue’s questionable campaign spending, he is finally being asked the sort of questions for which Innu residents surely would like some answers.

As Chief Justice Derek Green reminded us in his report on the the House of Assembly patronage scandal, the way officials and politicians respond to issues such as accountability is set by the tone at the top.

Soupcoff said:

If the Conservatives truly believed in maintaining a government of principle, they would be demanding answers from Mr. Penashue about why money that was meant for a deprived First Nations community ended up in his campaign coffers.

Let’s see what happens.

-srbp-

Executive Politics and Muskrat Falls #nlpoli

In this series, we are not concerned with whether or not the Muskrat Falls project is good or bad. That is a separate issue.

Nor are we presenting information you shouldn’t already have.  Very little of what you will read should come as a surprise, especially if you  read SRBP regularly.

Rather this series is an effort to develop some explanations about why the provincial government’s energy company has been working on the Lower Churchill Project continuously for 15 years and yet has produced nothing.