Tuesday, 20 October 2015

Anything but the will of the majority: democracy failed us under first-past-the-post

Canada's longest election campaign in a century has produced a first-ever result: a third-place party vaulting to a landslide win. As Western provinces will appreciate, this was not exactly the will of the electorate.

But that's political irony for you. As Eastern provinces would appreciate, the previous three federal elections did not exactly reflect the will of the people, either. And before that, the West spent a long time on the outside looking in.

In fact, in living memory, no federal election has ever fully reflected the will of the majority of Canadian voters.

Fortunately, that record has a good chance of ending soon. In this election, about 62 per cent of Canadian voters cast their ballot for a party that had promised immediate electoral reform as part of their platform. (That would be all the parties, minus the Tories, who reject any such notion and the Bloc which was silent on the matter.)

With just 39.5 per cent of the popular vote, the Liberal Party and leader Justin Trudeau secured 184 seats in an expanded Parliament of 338 seats. Proportionally, that's close enough to the result gained by the Conservatives under Stephen Harper last time around.

In each case, more than 60 per cent of Canadians had voted for something other than the party that won. In Canada we call that democracy, and it generally serves the incumbents pretty well.

In the hours before polls closed in Quebec, Ontario and the prairie provinces, pundits had a lot of time to watch the Red Wave gather in Newfoundland and the maritime provinces. A total Liberal victory in every riding, with popular support around 70 per cent. Anyone would call a result like that a democratic return.

The pundits and party reps around the shiny glass tables on the TV networks bantered at length whether Liberal support in the rest of Canada would prove a mile wide and an inch deep. They suggested solid core support in other parties in many ridings might rally over widespread but soft support for the Liberals.

Well, we found otherwise, didn't we? In Canada, an inch deep is all you need to form a majority government.

In the campaign, Trudeau repeated whenever asked that the 2015 election “will be the last conducted under the first-past-the-post system.” If his promises are to be fulfilled, look for an all-party committee to recommend changes to our election system within 18 months.

NDP leader Thomas Mulcair — whose support is deep but not very wide — lost the great gains made from wide-but-shallow support for Jack Layton in the previous election. Mulcair favours straight-out adoption of proportional representation, which would have given his party 66 seats this time around, instead of 43.

But even that would have been a drop from the 71 MPs the NDP would have elected in the last Parliament, if seats had been allocated according to national popular vote.

The Green Party under Elizabeth May are electoral reformers in a hurry. Under proportional representation, there would be 11 Green MPs in Ottawa this time around, instead of just one. She wants an all-party committee to come up with a full-blown report on electoral reform, including draft legislation, within a year.

My political acumen may be neither deep nor wide. But my impression of the campaign was that Canadians were not in the mood to re-elect a fourth-term Conservative government. No electorate in our history has ever elected four straight governments of the same party. Three terms mark the best-before date of any leader.

Just the same, the alternatives were never straightforward. My reading suggested Canadians were convinced that a minority government was the most likely outcome, and if so, a Liberal minority, backed by the NDP was the better choice. That's how I read it, anyway.

So it seems that enough people wanted a Liberal minority, enough in fact to give them a majority. Just a few ticks under 40 per cent of voters cleared the mark.

Under any type of reform, Canada would probably have a Liberal minority government today, instead of a majority. The dynamic in the next Parliament would have been different.

There would have been less “strategic” voting. People could vote for the party platform they preferred, knowing their wishes would be fully represented no matter who their local MP might be.

That's in contrast to what we saw: people voting against a party whose leader had worn out his welcome, even among many in his own rank-and-file.

Knowing that a new Parliament would require some co-operation between parties would also have tempered the personal attacks and base negativity of the campaign we've just endured.

And I think Canadians would have gotten more exactly what they voted for — which is a better democracy.

Tuesday, 13 October 2015

Angus Deaton wins a devil of a Nobel

When I read that Angus Deaton, a professor at Princeton University, had won this year's Nobel Prize in Economics for his work studying poverty in developing countries, I was intrigued. What did the world learn from his studies?

Basically, we've learned that the world is a better place today than it used to be. Poverty is down, life expectancies are up, disease is down and fewer families are watching their children die soon after birth.

But how do we apply what Deaton has discovered? Well, the devil is in the details, and Deaton apparently has a great love of detail. Excruciating detail, explained in mathematics.

I noodled around a bit, trying to find some of that detail explained in plain English. Much of my information (and subsequent speculation) comes from the Nobel committee itself, which published two surveys of Deaton's work: one for economists, and one for the rest of us. You can find the general summary at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2015/popular-economicsciences2015.pdf

Poverty, says Deaton, is in how you measure it. Put more accurately, the result of policies designed to improve the lives of the poor cannot be predicted by the macroeconomic theories that we've previously relied upon. Deaton suggests that using the wrong tools to measure poverty has over-stated the numbers of people living below the poverty line by as much as half a billion people.

Instead of studying big-picture measures like GDP to assess whether governments are doing the right things by their people, Deaton employed large numbers of house-to-house surveys and compared patterns of household consumption over long periods of time.

He found the greatest devil that tortures economics: that people are not always rational. He found that it's better to measure and predict things by looking at the behaviour of individuals upward, than to predict the behaviour of whole populations from the top down.

His theories (and the basis of his Nobel award) are contained in theory called The Almost Ideal Demand System, which I can assure you I have not studied.

Here's a Deatonian issue that might apply in Alberta: would the poor be better off in Alberta, and incomes less unequal if we had a provincial sales tax?

My personal bias leads me to say yes. Taxes on consumption tend to equalize after-tax incomes because the rich can consume so much more. They also tend to stabilize government revenue, which leads to more predictable funding of services like schools, etc., which benefits people on low incomes.

Ah, but then there's the devil of irrational behaviour. Deaton's detailed questionnaires of families helped him formulate mathematical equations that would tell a government just how much a one-point adjustment in a sales tax (or sales tax cash rebate) would affect purchases of food, clothing or other goods by poor families, by changing that family's after-tax income.

These equations predict who wins and who loses — and by how much — with each change.

In fact he has separate equations for each type of consumer commodity, which I am quite sure our federal government did not apply when it decided to lower Canada's GST by two points.

Previous economic theories suggest people generally spend less and save more when they expect their incomes to drop. But we've found in Canada that people are entering lower-income retirement in record-setting levels of debt. Irrational, but true.

What, if anything, should governments do to encourage more saving? Call professor Deaton, I guess.

One surprising thing I learned is that Deaton is no great fan of international economic aid from rich countries to poor ones.

He says the practice undermines the ability of countries to grow their economies, and that if we feel we ought to do something to help the poor in those countries the something we should do is to stop giving them aid.

As well, Deaton says the fact that family incomes grow unequally in developing countries is not necessarily a bad thing. Inequality, he says, is a consequence of progress, proof that progress exists.

No doubt someone is hard at work writing a movie script about all this, the way they did for John Forbes Nash Jr. who developed Game Theory and inspired the movie A Beautiful Mind.

I expect such a movie would have to involve a conversation with the devil of details.


Follow Greg Neiman's blog at Readersadvocate.blogspot.ca

Monday, 12 October 2015

Huge savings to be found in health and the justice systems

A recent letter to the editor in the Advocate has suggested it's a bad idea to spend public money on a provincial wellness initiative, when there are so many non-profits able to handle that portfolio for the province, at a much cheaper cost.

Since the new Alberta government is about to release its first provincial budget, I thought I might point out a local community wellness project to remind us that community wellness has a pretty high return on investment. And that if we want to maximize profits from these investments, it makes sense to “go big” and have them cover the entire province.

I recently attended the annual general meeting for the Red Deer Canadian Mental Health Association. When you volunteer, you're a member (my wife also works for CMHA).

One of the duties performed at an AGM is to recognize exemplary work within the organization and hand out awards. The first award given this year was to Red Deer's Police and Crisis Team (PACT).

Actually, Red Deer has two such teams, and there is a push on to both create a third Red Deer team, and also to demonstrate the need for a regional team outside the city. That's if the organizers can find the money (which in this case means investment from Alberta Health Services).

A PACT team consists of two members: a full-time RCMP member and a registered nurse with mental health training. They are called to cases where mental health issues are involved, or where people under significant stress may harm themselves or others.

The police staff are paid out of the general policing budget. It's a full-time placement — they have no outside policing duties. Red Deer's Primary Care Network has found budget for the nursing side. So, as far as spending for mental health services goes, it's a pretty cheap deal.

The problem is that the PACT teams are so successful, a third team needs to be added. Red Deer RCMP have already said they would find staff budget internally for a third officer, but PCN cannot expand the program with their current funding.

More, the success of the program has extended beyond city's RCMP jurisdiction. Red Deer police cannot fund a regional program, but depression, anxiety, suicide and other mental illnesses do not respect city boundaries.

We were told that last year, the Red Deer PACT teams attended to 805 cases. Where previously they would generally have ended in arrest or a forced visit to the hospital emergency ward, in 740 cases — 92 per cent — people were instead put in touch with local support services instead.

The savings to taxpayers in both our health and the justice systems are huge.

Without PACT, when a situation comes to the point where police are called, arrest or a trip to emergency ward are pretty well the only two possible outcomes. Police are not trained to make mental health assessments and are not trained to bring people to other services.

I was able to find that a visit to an Alberta emergency ward costs taxpayers on average between $150 and $225 per visit. When police take people to the emergency ward, they must stay with their charges until medical staff can take over responsibility for them. The wait can last hours, adding to the cost to taxpayers, and taking police away from other duties.

Anyone with a calculator can make a rough calculation of the cost of 700 or so emergency ward visits, and only guess at the staff costs for the hours spent by police sitting, waiting.

I was also able to find that in 2004/05 there were 40,000 emergency visits for mental health reasons in Alberta. Another provincial site posted that 12-15 per cent of all health disorders are for mental health.

Yet, in much of the province, a mental health crisis is dealt with by police alone, and people who are sick end up in the criminal justice system. That's what police are trained to do with someone who's at risk of harm to themselves or others.

The tax cost of this is nearly impossible to calculate, not just the cost to taxpayers of this misuse of the justice system, but of the lost opportunities for well-being of people who shouldn't have gone into the justice system in the first place.

The current practice criminalizes mental illness, delays treatment and raises needless fears in the community that people who are mentally ill are dangerous. We've seen these fears played up even in the current federal election campaign.

The cost of all this can easily be prevented, if we invest in a cross-provincial PACT program. Locally, we could at least free up more emergency ward time for local patients, and clear court time for other cases, if we expanded this wellness program here.

But it's not the job of non-profits to do this on their own. They must be funded. With tax dollars. And if we want to save hundreds of millions we now spend in Alberta's emergency wards, on jails, courts and police time, a few million spent on a provincial wellness program isn't such a bad idea at all.

Tuesday, 6 October 2015

Freer trade and poverty reduction may be the same story

The close timing of two of the world’s most important news stories of the year seems almost too good to be coincidental. I believe they are connected and hold lessons for Canada.

In the past few days, 12 nations — including Canada — signed an agreement to form the Trans Pacific Trade Partnership, creating the second largest trading bloc in the world (after the European Union). Trade barriers will fall in the coming years, opening markets to global competition that till now have been been protected by restrictive tariffs.

Also in the past few days, the World Bank announced that for the first time in history, the number of people living in extreme poverty is expected to drop below 10 per cent of total world population. Their report flags some significant numbers: in 1990, more than a third of the world subsisted on less than US $1.25 a day; today, a new accounting system adjusted the rate to $1.90/day, but while global population has risen, the portion living below that line has dropped from the 1990 level of 1.95 billion people, to 702 million today.

Jim Yong Kim, president of the World Bank Group calls it the “best story in the world today.” In 2013, shortly after Kim became president, the World Bank adopted two goals. One was the eradication of extreme poverty by 2030; the other was to boost the rate of the globe’s shared wealth, by raising the incomes of the world’s bottom 40 per cent.

Where were the greatest gains made? In two nations that were taking away a lot of North American manufacturing jobs: China and India. Where were the poorest gains made? In countries that have less manufacturing and which are mostly reliant on natural resource exports.

Makes you think, doesn’t it?

My reading of the coverage of this report finds little or no mention of their second goal, but I can’t help imagining that increasing the wages of the bottom half of workers created conditions that elevated the incomes of the poorest of the poor. This wasn’t charity alone, it’s business.

Consider India, which still has the world’s largest population living on less than $1.90 a day. The Times of India had trouble reporting the World Bank’s story because of this. Which is more significant: that the greatest gains since 1990 in eliminating extreme poverty were made in India (the lowest population percentage of countries with the largest numbers of very poor people), but while it brought millions out of extreme poverty, India just happens to have a very large population. So the number of those in extreme poverty in India is still the lion’s share of the Asian group of countries.

Or China. In 1990, the Chinese tiger was just discovering its potential. Two decades since of hyper-fast urbanization has fed an army of newly-educated workers into their factories to produce stuff at a fraction of the wages being paid in the wealthy West.

Good news? Bad news? Depends on whether you were dirt poor in China before you got a job making auto parts, or were paying down a big mortgage in Canada before you got laid off doing the same thing.

My point is we need perspective. Canada lost jobs and a fair amount of economic potential when the BRICs stole away much of our manufacturing sector. But if we only look at our losses, we miss a bigger picture.

The world is a better place with fewer really poor people in it. Rather than moaning about businesses relocating their manufacturing to low-wage India, China or other developing countries, we may need to adjust our sights as to what our own income expectations are. Our middle-class salad days may be behind us — we need to start competing again.

One way to do that is to level the playing field between nations in how we conduct international trade. Developing countries discovered that a good way to treat wealthy neighbours was to sell them stuff — including their labour.

If wealth were more evenly distributed, perhaps we could begin to do the same.

Tuesday, 22 September 2015

Ours souls are OK when the state is OK

Both Canada and the U.S. were formed with the concept that people ought to be free to live according to the religious beliefs of their choosing. Our rights to free speech and to elect our own government, which is bound by a national constitution and set of laws, form the balance between our religious freedoms and our secular freedoms. They are the bedrock of our two nations. 
It’s when people confuse their religious freedoms with their secular duties that the balance breaks down. 
Two examples, taken from recent news headlines. 
In Rowan County, Kentucky, the people believe in participatory democracy. Even the county clerk’s office is an elected position. In their case, they elected a county clerk who follows a strain of evangelical Christianity that holds that she has God’s authority to decide who can or cannot get married. In her mind, the laws that uphold the freedom of everyone lay beneath that authority, at least as far as marriage is concerned. 
So, rather than obey a court order requiring her to issue marriage licences to gay couples, Kimberly Davis decided last June to not issue marriage licences at all. Her chosen faith tells her that same-sex marriage is part of the broad path that leads to damnation, and she will have no part of it. 
So, of course, to preserve the basic freedoms of Kimberly Davis and everyone else, Kimberly Davis was put in jail. She emerged a few days later to a hero’s welcome, flanked by a gravely misinformed presidential candidate, still defiant of the law any president would need to use the entire power of the state to uphold. 
Marriage licences for Rowan County were issued by her assistant while she was in jail (we can assume there was a rush of applications while she was gone). But it has been reported that Davis later confiscated and altered those licences, making their subsequent marriages legally suspect. 
This is obviously not what Davis was elected to do. But people continue to confuse the rights of religious practice with the ability to impose individual beliefs over and above the law of the land. So, encouraged by an eager media, Davis is enjoying a brief spell of fame as a living martyr of sorts. 
She is nothing of the kind. She is free to believe as she wishes, and free to speak of the values that bolster her beliefs; the nation’s constitution and laws have carved that in stone. 
But she is no more free to defy the laws that govern her public duties, than a person whose beliefs forbid contact with pork can refuse to licence a hog processing plant, if that happens to be their job. 
Here’s another example. Ranee Panjabi practices a unique form of Hinduism that is strongly concerned that “nothing must mar the soul’s identification with the person.” 
What might mar that mystical unity? Wearing a microphone, so that a hearing-impaired student in her class at Memorial University in St. John’s can follow her course on the history of espionage. 
She has complaints dating back 20 years on her refusal to do so, and has been officially reprimanded in the past for refusing to wear a microphone during class, when asked to do so by a student who needs some assistance to hear the lectures. How’s that for the power of academic tenure? 
She told a TV interviewer “the microphone would interfere with the harmony I must always feel between my inner self and my outer person.” More than one expert in Hinduism have called that baloney. 
One wonders how Panjabi feels about her soul while she’s talking on a cell phone. Merely temporal disunity? 
Amazingly, her employers at Memorial are both flummoxed and hamstrung by this. Deciding this is not rocket surgery. If your religious beliefs forbid you from fully completing your secular duties, you get another job. 
No religion “owns” marriage. No soul can decide that another soul should not be taught (especially if that soul has paid tuition). 
Our freedom to practice does not include the freedom to deny one’s own legal obligations in public service. 
If we cannot get our heads around that, we need only look at our own Western history of religious wars and persecution, and the current history of religious state-ism in the Middle East. 
A secular democracy, bound by laws and a constitution works far better than a society where clerics can decide your rights, or where individuals can decide their souls might be more important than yours.

Monday, 14 September 2015

Surprise surplus neither surprise nor real money

Suppose you are an average Canadian family with two wage-earners, making a total of $71,500, which is about the middle of the middle 20 per cent group of all Canadian families. You and your spouse had promised each other that once you turned a financial corner, and were no longer sliding into debt, you’d do something nice together. Maybe a weekend escape, just the two of you. 
You tally all of last year’s income versus expenses and discover  to your complete surprise  that you have $1,100 left over. Time to make a hotel reservation, and maybe a meal in some classy restaurant? Well, maybe, but would you do it if one of you had sold your Chevrolet Equinox for a loss, just to make the numbers look better? 
Granted, you’re not sliding worse into debt, and after all, the interest on your mortgage and credit cards put together is only $530 a month. For a family in the middle of the middle, you’re doing OK. But if you want to be honest with each other, you have to admit you’re just lucky to have broken even. 
A small indulgence for a family like this might actually be in order. But for a government, it’s nothing to crow about. 
Monday’s announcement that the last budget year ended with a $1.9 billion surplus certainly isn’t bad news. After all, when last year began, we were expecting a $2-billion deficit. But when you sell assets at a loss (the shares in General Motors the government bought during the recession), and short out spending on priorities that Parliament had previously approved, let’s not get too excited. 
The figure quoted in news releases Monday refer to about 1.5 per cent of budget spending. Our government will spend about $288 billion in the current budget year. What’s $1.9 billion inside of that? 
Well, it’s $1.9 billion, and as the American politician Everett Dirksen once said: “A billion here, a billion there, and pretty soon you’re talking about real money.” 
Our current election seems to constantly circle back to who it is we trust best with their hands on the federal cashbox. No other consideration seems to have traction; not protecting our environment, not Canada’s place in the world as a trade partner or peacekeeper, not our obligations to the poor either at home or abroad, not whether the government and its agents even follow the law. Just how big our own personal tax bill is and whether this year’s budget balances within 1.5 per cent. 
Maybe in today’s world, that’s all most of us expect from government. Tax us if you have to, but please, no big pictures  and for God’s sake balance the budget. 
If that’s true, then Monday’s announcement is all the Conservatives need to win the election. Who’s Mike Duffy anyway? Health care is a provincial problem, isn’t it? We can bomb people in foreign countries, as long as none of our people get hurt. And as far as that goes, we don’t especially like their refugees. 
If government lies to us, hides noxious policies in omnibus bills and chivvies away at our international reputation on peacekeeping and the environment, all can be forgiven for a balanced budget. 
If the equivalent of $1,100 to a middle-income family one year in six is the bottom line in our expectations of government, we really have no expectations at all.  
Just don’t any of us try to call this leadership.