Falcon’s Jest – The tale of the tape

Just to add to the last post, this chart from the recently released B.C. Stats report is the one that is the most telling, in my opinion:

You can see that for most of the last 35 years B.C. has scored better than the rest of the country. You can see that, for the most part, B.C. has tracked with the rest of the country. Finally, you can also see a very noticeable spike just after 2001, which the Canadian average did not match, and which B.C. has never recovered from. The B.C. Liberal Party came to power in the spring of 2001.

It’s true that B.C. surpassed Canada in the waning days of the NDP government, as it had briefly at times previously (the one exception being the noticeable bump during Bill Bennett’s term).

If we are to believe Kevin Falcon, a lot of high-paying jobs were created in 2001-02 which, unfortunately, only a lucky few were able to score. Of course, if the chart is to be believed these jobs seem to have started declining in 2003 but, hey, that’s probably just the market readjusting or something.

None of this has anything to do with the massive tax cuts enacted in the B.C. Liberals first term and the data certainly doesn’t indicate previously wealthy people getting much wealthier. Not by working harder, or innovating, but because they paid the taxman less.

And the rest of us? Well…not so much.

Good old Kevin Falcon. And you thought it was Bill Vander Zalm who lived in Fantasy Gardens.

Falcon gap growing in B.C.

Per the Notable Linkage below, income inequality in British Columbia is now one of the worst in the nation, while Canada overall finds itself on the lower end of the scale of developed nations.

But here is the reaction #1 of B.C.’s Finance Minister to what should be distressing news:

Falcon doesn’t dispute the numbers in the study, but he takes issue with the analysis.

“I just have trouble with people saying, ‘Oh, because there’s a gap there that’s must be a bad thing.’ You know remember, as I mentioned earlier, and I’m not being flippant, but in Cuba they don’t have any income inequality because they’re all poor,” he said.

Let me translate: “Don’t like it? Go back to Russia, hippie!” But is it even, you know, true? Well, for one, Cuba doesn’t actually release statistics of this sort. But even a casual observer would note that, yes, there are a lot of poor people in Cuba…but there’s also apparently a tiny elite who, you know, live very well. In other words, it’s a very unequal society. Then there are, you know, all those other countries that aren’t Cuba where the gap between rich and poor isn’t as pronounced as it is here. Terrible places like Denmark and Germany and Australia.

In the Sun Falcon provides us with a bit of a more grownup reaction:

“We’ve spent the last 10 years working hard to bring back high-paying jobs to British Columbia,” he said of the Liberal government.

“This goes to the very core of what kind of government the public would like to have,” Falcon added, saying he believes Dix would increase income and corporate taxes if elected premier.

“What we’re saying is we want to have the high-wage jobs in British Columbia and we don’t want to scare them away and chase them away as we did in the 1990s with high taxes.”

The idea that the growth in income disparity in B.C. is due to the influx of high-paying jobs is at least an explanation that lies within the realm of the plausible.

But is it, you know, even true?

One could simply look at the unemployment rate in 2001 and 2012 to get an inkling of the truth of this, but the Government’s own statistics contradicts the Minister’s statement:

Employment in British Columbia rose slightly (+0.5%, seasonally adjusted) in December, following declines in each of the two previous months. However, due to an expansion in the number of people looking for work (+0.4%), the province’s unemployment rate ended the year unchanged from the previous month, at 7.0%. Growth in the number of part-time jobs (+1.6%) was the main reason for the overall increase, with full-time employment increasing marginally (+0.1%) compared to the previous month.

I guess the number of millionaires with part-time jobs increased. But wait a sec, is this the whole story? I seem to recall there was better news in the Fall…

The public-sector accounted for a gain of 36,900 workers, while there were 14,900 fewer in the private sector and 38,900 more people were self-employed.

Perhaps not surprisingly for the month September, most of the job gains came in the area of educational services. There were 38,000 additional people working in the category last month, Statistics Canada said.

Employment in education was up 20,000 from where it was in September last year.

Ah! It’s those fat-cat teachers responsible for the gap! You know, the ones Falcon and co. are currently trying to crush.

So, in summary, plausible. But delusional.

Notable Linkage: BC Stats: Infoline: Mind the gap [PDF]

Excerpt:

According to Statistics Canada, there has been significant growth in income inequality in both BC and Canada as a whole over the last 15 years. Through the 1980s and 1990s the Gini coefficient of income inequality for British Columbia averaged 0.29, but from 2000 to 2009, it averaged 0.33.

Among the provinces, only Alberta registered more after-tax income inequality than BC in 2009. The only other province above the Canadian average was Ontario. Prince Edward Island had the smallest income gap among the provinces. However, British Columbia ranked fifth and Alberta seventh in terms of inequality when market income is used (i.e., excluding government transfers and before taxes). Newfoundland and Labrador had the most income inequality, followed by Nova Scotia, Ontario and Quebec. This indicates that these provinces have had more success in terms of redistributing income through their tax and benefit systems than have British Columbia and Alberta.

BC Stats: Infoline: Mind the gap [PDF]

BC Ferries and the bitter tears of Adam Smith

Monopoly, besides, is a great enemy to good management – A. Smith

So we have the BC Ferries commissioner issuing a call for a major overhaul of BC Ferries. It’s a sharp repudiation of the entire approach of the BC Liberal Party to our ferry system (indeed the underlying ideology of our alleged free-market political party). As most users of ferries know, prices have risen significantly, service is not much better, and the finances opaque to the public. It’s not working, and the commissioner urges the abandonment of the user pay system. There are lots of juicy quotes here:

Fares since 2003 have gone up 47 per cent on the major routes, 78 per cent in the north and 80 per cent on minor routes.

and…

current fares impose “significant hardship” on ferry-dependent communities and were affecting the ability of people to visit family members and friends as frequently as they would like.

and my favourite:

Lindsay Meredith, a marketing professor at Simon Fraser University, said the Liberal government “ran into Economics 101.

“It’s basic, fundamental, down-and-dirty, easy-as-it-gets demand and supply. … Jack up your price and watch your demand plummet,” he said in an interview.

But there’s more forgotten Econ 101 than that. In fact it’s kind of fundamental – whom does BC Ferries compete with? Whose competition is forcing them into the ever greater efficiencies the “crucible of the market” is supposed to force? I’m not an expert on ferries or transportation systems, but even I – a liberal arts student! – have never understood this crazy system the BC Liberals have set up (in more than one area). Privatization without competition is monopoly and a private monopoly is worse, much worse, than a public one. At least in democratic states where the rule of law is well-established, which try as the Liberals may to undermine it, British Columbia has and retains.

I can’t vouch whether the European consumer is well served, but at least you have a choice of ferry companies when you take your car to or from the UK.

I am obviously left of centre, but I’m not rigid. There are, in my view, things currently being done by our government that the market would do better (if your goal is better value for your citizens). Are we really well served by our government-run liquor distribution system, for example?

But BC’s population isn’t large enough currently to support competing ferry companies. And while some routes might not make economic sense, economics is not the only consideration. There’s the social, and the strategic. If we abandon ferry routes on the grounds they aren’t economic we are also abandoning claims of sovereignty over those communities the ferries serve. Use it, or lose it as someone once said. That’s international law.

However, sovereignty has also been increasingly defined in terms of state responsibility. This includes a state’s exercise of control and authority over its territory

We’re not in immediate danger of losing the Gulf Islands, but if communities starting shrinking and failing one day someone will say they use the land if we don’t want it.

The BC Ferries experiment in “privatization” has failed.

It is thus that the single advantage which the monopoly procures to a single order of men is in many different ways hurtful to the general interest of the country. – A. Smith

UPDATE: Oh noes! A bond agency – who we all know always have our best interest at heart – doesn’t like what’s going on!

In a statement posted on its website, Dominion Bond Rating Services says adopting all of the changes proposed by BC Ferry Commissioner Gordon Macatee this week would erode a framework that has prevented political interference and made the corporation more efficient.

BWAHAHAHAHAHA

Notable Linkage: What did corporate tax cuts deliver [PDF]

Excerpt:

The argument for corporate income tax cuts has been that increased after-tax corporate profits would be re-invested in company operations, boosting economic growth, productivity, and jobs. However, studies have shown that rising corporate after-tax profits have not resulted in increased real investment.

This study looks at the profits and investments of Canada’s largest companies, those listed on the S&P/TSX Composite Index, from 2000 to 2010.

What did corporate tax cuts deliver [PDF]

Get Smart

This op-ed by the Vancouver Sun’s Craig McInnes has been making the rounds of Twitter today. He, like a lot of other provincial beat reporters, comes out to bat for the CBC’s Stephen Smart, accusing critics of fallacies of logic and even, yes, sexism. He compares Smart’s situation to his own at the Sun, where he met his wife. However the only fallacy I can see is his own:

When my wife and I worked for the same employer, we avoided any situation where one of us would be reporting to the other.

Super, except 1) that’s a statement about the reporting structure within a company and is a rule common in most workplaces and 2) it’s Smart’s job to report on his wife’s employer the B.C. Premier. He can’t avoid it. Not if he’s doing his job.

Contrary to popular opinion, journalists are not locked in a constant struggle to bring down the government of the day, exciting though that might seem. We also have a vested interest in the success of our politicians

It’s true, it’s not the singular purpose of the press to bring down the government. Then again I’m not sure having a “vested interest in the success of our politicians” is part of the curriculum at journalism school. Whatever happened to the concept of the “adversarial press”?

That just isn’t what “adversarial” means. An adversarial press does not mean that the media automatically and reflexively contradicts what the Government says or does. That is called being a mindless “contrarian,” not “adversarial.”

An adversarial process is designed to uncover deceit and falsehood by ensuring that claims and arguments are subjected to meaningful scrutiny by some opposing force. An adversarial press means that it views its function as a watchdog over the Government, as a check on its power. It fulfills that function by viewing Government statements and actions skeptically and with the intent to scrutinize them and determine their truth.

This isn’t to say Stephen Smart isn’t doing just that. But who could fault the public at large for having the perception his reporting could be affected, even unconsciously?

No one involved in the Smart/Scott complaint has any examples of the perceived conflict between the two corrupting the coverage of any story by the CBC.

Proving a negative: No one knows if Smart sat on a story or pulled punches. Maybe not. But maybe yes.

The notion competing professional interests can’t coexist under one roof dates back to the not-so-distant past when the model family consisted of hubby heading off to work and the good wife staying home and supporting him in every way.

No it doesn’t. Rules like this, preventing family members (not just spouses!) with competing professional interests from being professionally involved have existed for a long, long time. Note the emphasis on “competing”. Here’s an example of another news organization’s guidelines for dealing with family members.

This isn’t really about Stephen Smart. This is about the CBC. This is about why I, as a member of the TV-watching public, won’t change the channel because I think the reporting might not be as cosy with the government of the day elsewhere.

Kirk Lapointe made a ruling based on the CBC’s own guidelines. Craig McInnes doesn’t want to say he thinks Kirk Lapointe should have ignored them. Instead he tries to make it about the critics in the blogosphere.

UPDATE: Outside of the Legislature beat, Victoria is small-time, media-wise. Being reassigned would be a step down if one were to stay in Victoria (no offence to Victoria’s other reporters). It’s not a pleasant situation to be in.

UPDATE 2: Both Norm Farrell and RossK highlight an appearance by Keith Baldrey on Bill Good’s radio show in which he posited the following:

Keith Baldrey: Ya. I mean he’s my competitor. And I think it’s outrageous to suggest that his job performance has been anything less than exemplary. I mean, we compete for stories…. Here’s a great example. Christy Clark revealed that she wasn’t callin’ a fall election on my television station and a couple of other news outlets, and not the CBC (back in September)… It was, you know, he (Smart) doesn’t gain necessarily from the relationship his wife has with the Premier. In fact, I think, if anything he’s probably hurt by that.

Ok.

So why would I watch CBC if one of it’s reporters has a hand tied behind his back?

Just sayin’

Gimme Shelter

Reading this piece at the Mainlander on the lack of affordable housing in Hong Kong reminded me of something. There are actual large-scale protests in Hong Kong over the lack of affordable housing, 200,000+ strong.

You see, Hong Kong is rated by the Heritage Foundation as #1 on their annual list of “Economic Freedom”. If one was in a certain mood, one might conclude that even in a place so committed to “entrepreneurial dynamism” the market fails to provide solutions to one of humanity’s most basic needs. That would be shelter. (Shhh…don’t tell the Heritage Foundation that even in this capitalist paradise, 50% of housing is public housing – and the market still fails to provide the rest). It’s almost as if the natural outcome of the Heritage Foundation’s conception of “Economic Freedom” isn’t freedom but, you know, monopolies and what the Hong Kong protest movement dub property hegemonies:

[A] university professor summarized the situation, saying that “public discontent had reached a ‘critical point’” because of the affordability crisis. “Mr. Li used to be an idol of Hong Kong people. But now he becomes a symbol of so-called property hegemony

Also and unrelated, I found this funny:

Although Hong Kong maintains its ranking as the world’s freest economy, policies proposed or implemented since the second half of 2010, particularly the establishment of a minimum wage, have moved the economy modestly in the direction of greater regulation.

Oh noes, tyranny!

Notable Linkage: Robert Reich: The State of Our Disunion: A Globalized Private Sector, A Corporate-Dominated Public Sector

Excerpt:

An Apple executive says “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing a big enough profits to continually increase our share price.”

Most executives of American companies agree. If they can make it best and cheapest in China, or anywhere else, that’s where it will be made. Don’t blame them. That’s what they’re getting paid to do.

What they want in America is lower corporate taxes, less regulation, and fewer unionized workers. But none of these will bring good jobs to America. These steps may lower the costs of production here, but global companies can always find even lower costs abroad.

Put simply, American workers are hobbled by deteriorating schools, unaffordable college tuitions, decaying infrastructure, and declining basic R&D.; All of this is putting us on a glide path toward even lousier jobs and lower wages.

Robert Reich: The State of Our Disunion: A Globalized Private Sector, A Corporate-Dominated Public Sector

Notable Linkage: Center for Union Facts Steps Up $10 Million Ad Campaign Backing Broad Anti-Union Bill – Working In These Times

Excerpt:

CUF’s campaign also features a full-page New York Times ad comparing union members to subjects of the North Korean dictatorship. Asked to explain the comparison, CUF Managing Director Justin Wilson says that because they started work once the union had already been voted in, “90 percent of the people in labor unions have had about the same degree of opportunity to express a democratic interest in the unions that represent them as the people in North Korea.”

Kate Bronfenbrenner, director of Labor Education at Cornell University, questions CUF’s math and its logic. “Does North Korea have Duty of Fair Representation?” retorts Bronfenbrenner, referring to unions’ obligation under federal law to represent members without discrimination. “No other institution has that standard…Union records are open, all officers are elected, and all contracts are voted on.”

Center for Union Facts Steps Up $10 Million Ad Campaign Backing Broad Anti-Union Bill – Working In These Times

He forgot everything he learned in school

Memo to Daniel: Provinces and the Federal government can adopt “net-zero” stances in contract negotiations. Municipalities can’t. Why? The Feds and Provinces have the ability to create back to work legislation – a required chess piece for this bargaining stratagem. Not so municipalities. One would think you’d have known this.