Quotulatiousness

March 31, 2013

Ralph Klein, RIP

Filed under: Cancon, History, Media, Politics — Tags: , , , — Nicholas @ 09:47

In Maclean’s, Colby Cosh talks about the late former premier of Alberta:

Ralph Klein, the former premier of Alberta, has died at 70. He shall not now ever be able to collect on the vast debt of apologies he is owed by calumniators, false chroniclers, lazy pundits, and political enemies. The misunderstandings of Ralph have been copious and mostly deliberate. He is still routinely characterized as an anti-gay social conservative in league with sinister theocratic forces, even though he was personally about as churchy as an alley cat. More importantly, he took a diamond-hard line against the use of the “notwithstanding” clause after the Supreme Court wrote sexual orientation into Alberta’s discrimination law in the Vriend decision; and he insisted the public accept the court’s verdict.

He is accused of failing to maximize the public benefits of Alberta’s resource wealth and “save” oil and gas funds for the future, although government resource revenues grew more than fourfold in his 14 years as premier and the net financial position of the province improved by $43 billion. Both promptly collapsed under his bamboozled successor Ed Stelmach, and have not yet recovered to Ralphian levels. Klein is also charged with failing to pay enough conscious attention to economic diversification, a concept that served as the pretext for a hundred costly boondoggles under earlier Conservative regimes; yet somehow he succeeded in presiding over an Alberta economy whose GDP moved sharply away from energy-dependence, and which saw the emergence of previously unimaginable non-energy businesses like software maker Matrikon and game manufacturer BioWare. Whether or not you care to give an iota of credit to Klein, his rule coincided with Alberta becoming a place young technicians and entrepreneurs don’t have to be stupid not to leave.

[. . .]

There is a basic failure among diehard enemies of the Klein government to accept the evidence that his energy, privatization, and flat-tax policies increased the Alberta government’s capacity to spend and provide services — that the more we got of Klein, the safer and more lavish their cherished government entitlements appeared to be. They are not at all safe now; the profoundest irony of Klein’s demise is that it has arrived at a moment in which present premier Alison Redford faces choices like those Klein confronted when he captured the Progressive Conservative leadership in 1992.

Indeed, when Redford’s heavily obfuscated budget plans are translated into English, one sees that the next few years in Alberta must inevitably resemble the early days of Kleinism. Premier Redford is trying to protect spending on infrastructure to prevent a “deficit” in upkeep on buildings and transport, of the sort that materialized after Klein’s initial austerities. But operational spending, particularly on personnel expenses, is bound to be slashed, Klein-fashion. And the slashes will have to be all the deeper if the bridges are going to get painted. A fierce fight with the public sector (whose unfunded pension liabilities grew 80% between Klein’s last budget and Stelmach’s second) is already taking shape, with teachers, doctors, and pharmacists on the verge of all-out war over their pay envelopes. Haven’t the Klein-haters who fell over themselves to vote for internationalist, socially concerned Alison seen this movie before?

March 28, 2013

Paul Wells: They didn’t call it a budget because it isn’t a budget

Filed under: Cancon, Economics, Government, Media — Tags: , , , , — Nicholas @ 13:48

For example, a budget would actually provide you with comprehensible statements of anticipated revenues and spending for all the big ticket items:

I work in Ottawa and I try to stay on top of things, but this was news to me. In fact, I didn’t even notice it until four days after Finance Minister Jim Flaherty released his — er — plan on March 21. Of course, there was much chortling in the press gallery at the government’s insistence on calling its annual account of revenues and expenses something besides a budget. But the significance of the thing took a while to sink in. Flaherty and his boss, Stephen Harper, do not call their big annual document a “budget” anymore because it is no longer a budget.

A budget, as anyone who has tried to run a household knows, is the moment when you stop telling yourself soothing tales and inject a note of reality into your life. On page 64 of the 1997 budget, for instance, the government of the day gave us an “outlook for program spending” with multi-year projections for spending levels in defence, Aboriginal programs, “business subsidies” and so on. It was that straightforward.

Harper’s Economic Action Plans, by contrast, are carnivals of fantasy. EAP13 — we will use the government-approved hashtag, which I assume is pronounced to sound like a shriek of terror — is 200 pages longer than Budget 1997 but finds no room for a one-page program-spending outlook, nor indeed for a program-spending outlook of any length. Like the best funhouses, this one depends on its volume for much of its amusement value. The decision to merge CIDA into the Foreign Affairs Department is announced on the 31st page of a chapter on “supporting families and communities,” and I can only assume it is there as a reward for perseverance. The morning after Flaherty’s speech, a diplomat asked me how it is possible for a G7 country to release a budget that does not at any point say how much the government will spend on defence next year. I gave the fellow a long answer. I should have said his premise was wrong, because — stop me if you’ve heard this — it’s not a budget.

March 25, 2013

Budget Day was also apparently opposite day

Filed under: Cancon, Economics, Politics — Tags: , , , — Nicholas @ 10:51

In Maclean’s, Stephen Gordon give props to the spinmeisters in the employ of the federal government:

Full credit to the government’s communications strategists: they managed to produce budget-day headlines that said the exact opposite of what was in the budget.

The first thing I read on the morning of budget day was the National Post story about cutting tariffs on hockey gear. There was also a matching A1 story in the Globe and Mail and I walked to the budget lockup in a cheerful mood. Even though the numbers involved were tiny, I couldn’t help but feel encouraged about how the measure was being marketed. Almost without exception, trade liberalisation is presented as a concession to the demands of foreign exporters, but the real gains from trade are those obtained from being able to purchase cheaper imports. These gains can be obtained by reducing tariffs unilaterally – the most famous example is the repeal of the the UK Corn Laws in 1849. There was no drawn-out process of negotiations with corn (wheat) exporters in other countries: the UK government simply eliminated tariffs so that the population could have cheaper food. The morning headlines led me to believe that our government was going to implement a unilateral tariff reduction for the simplest and best reason: because it increased consumers’ purchasing power.

I was wrong, of course. Yes, there were those 37 tariff reductions, but there was also the measure to ‘modernize’ Canada’s General Preferential Tariff (GPT) regime by ‘graduating’ 72 countries from the GPT; imports from these countries will now face higher tariffs. Mike Moffatt estimates that those 37 tariff reductions will be accompanied by 1290 tariff increases. [. . .]

So instead of a unilateral reduction in tariffs, the government is planning a unilateral increase. This is not how a pro-trade government behaves.

March 20, 2013

Paul Wells says Harper and Flaherty have learned a lot about budgeting

Filed under: Cancon, Economics, Government — Tags: , , — Nicholas @ 10:26

Of course, this isn’t necessarily a good thing:

One thing Stephen Harper learned soon after he became Prime Minister was that Canadians have little intuitive grasp of decimal places. A government does not get 1,000 times more credit for spending $1 billion on something than it does for spending $1 million. In fact, it does not get twice as much credit. As long as the government notices a problem and nods at it, it wins approval from voters who care about that problem. So not long after his man Jim Flaherty started delivering budgets, a Harper era of small and essentially symbolic investment began.

Similarly, the ability to tell the difference between a little belt-tightening and a wholesale cut to a government service or department is not a widespread skill. So as long as the government offers only the vaguest information about its spending cuts, few Canadians will go searching for details.

This general numerical dyslexia will come in handy this year more than most, as Jim Flaherty tries to meet a zero-deficit target that is suddenly rather close — 2015, give or take — while dealing with a lousy economy.

March 15, 2013

The real cuts to the military budget

Filed under: Cancon, Military — Tags: , , , , — Nicholas @ 00:01

In Maclean’s, John Geddes examines the way budget cutbacks are being implemented in Canada’s military:

Perry’s fine-grained analysis starts by setting aside the major parts of defence spending that are, at least in theory, protected from cuts. Last year’s fiscal plan called for more than $1 billion a year to be cut from the defence department’s overall budget of more than $20 billion by 2014-15. That doesn’t seem so tough. But the Conservatives pledged to do that while keeping up the troop strength of the Canadian Forces, at about 68,000 regular members and 27,000 in the reserves, and also protecting most planned capital spending. According to Perry, that means about $12 billion a year was deemed uncuttable — leaving all the reductions to be found somehow in the remaining $8 billion that is spent on the civilian workforce and on military “operations, maintenance and readiness.”

How hard is it to achieve those savings? The clearest indication so far came from Lt.-Gen. Peter Devlin, the commander of the army, in surprising testimony he gave late last year before a Senate committee. Devlin said his land force’s operating budget has been shrunk by an eye-popping 22 per cent—a figure that doesn’t show up anywhere in publicly available defence documents. “As you would expect,” Devlin said with classic officer-class understatement, “that has an effect on people, infrastructure and training.” And he took pains to counter any suggestion that the army should be eliminating desk jobs to save field assets, stressing that administrative and head-office functions occupy only four per cent of his workforce.

[. . .]

Harper’s letter echoed the thrust of Lt.-Gen. Andrew Leslie’s 2011 “transformation” report. Leslie, who has since retired, conducted an extensive study of defence spending and concluded that the department must “ruthlessly focus” on reducing its spending on outside consultants and private contractors, with the aim of redistributing resources to military units. He delivered his report two years ago. Yet the latest figures available show that the defence department’s spending on professional services and consultants continued to climb to $3.25 billion in 2011-12 from $2.77 billion in 2009-10. And that increase came after a period when head-office growth outstripped the expansion of the fighting forces. According to Leslie’s report, headquarters personnel numbers grew 40 per cent from 2004 to 2010, while the regular forces grew by just 11 per cent.

March 12, 2013

US Army to standardize on four current UAV models

Filed under: Military, Technology, USA — Tags: , , — Nicholas @ 08:56

The US Army reasonably expects their budget to be under strain for some time. Here’s at least one sensible economy move:

Faced with smaller budgets over the next decade the U.S. Army has halted evaluation of new UAVs and is standardizing on four existing models (Gray Eagle, Shadow 2000, Raven and Puma). All four of these were developed and purchased in large quantities over the last dozen years and will remain the primary army UAVs for the next 5-10 years.

The army currently has nearly 7,000 UAVs. Over 6,000 are micro-UAVs like the Raven and Puma, These tiny (under six kg/13.2 pound) reconnaissance aircraft have become very popular with the troops, anyone of which can become an operator after a few hours of training. These tiny UAVs are a radical new military aircraft technology that is took air recon to a new level. That level is low, a few hundred meters off the ground. The army has nearly 1,798 Raven and 325 Puma UAVs systems in use by ground troops. A complete system (controller, spare parts, and three UAVs) costs $250,000 for the Raven and over $400,000 for Puma. These tiny aircraft have changed how the troops fight and greatly reduced army dependence on the air force for air reconnaissance. The lightweight, hand launched Raven UAV can only stay airborne about an hour per sortie, but troops have found that this is enough time to do all sorts of useful work, even when there’s no fighting going on. This is most of the time. The heavier Puma can stay up for 120 minutes.

March 10, 2013

Lockheed Martin’s budgetary force-field

Filed under: Military, Politics, USA — Tags: , , , , — Nicholas @ 11:15

In the Washington Post, along with asking why “the Navy’s Army needs its own Air Force”, Rajiv Chandrasekaran explains why the F-35 is close to un-killable:

The Defense Department and Lockheed Martin, the giant contractor hired to design and build the plane, also known as the Joint Strike Fighter, have constructed what amounts to a budgetary force field around the nearly $400 billion program.

Although it is the costliest weapons system in U.S. history and the single most expensive item in the 2013 Pentagon budget, it will face only a glancing blow from the sequester this year. And as the White House and Congress contemplate future budgets, those pushing for additional cuts may find it difficult to trim more than a fraction of the Pentagon’s proposed fleet, even though the program is years behind schedule and 70 percent over its initial price tag.

The reasons for the F-35’s relative immunity are a stark illustration of why it is so difficult to cut the country’s defense spending. Lockheed Martin has spread the work across 45 states — critics call it “political engineering” — which in turn has generated broad bipartisan support on Capitol Hill. Any reduction in the planned U.S. purchase risks antagonizing the eight other nations that have committed to buying the aircraft by increasing their per-plane costs. And senior military leaders warn that the stealthy, technologically sophisticated F-35 is essential to confront Iran, China and other potential adversaries that may employ advanced anti-aircraft defenses.

The biggest barrier to cutting the F-35 program, however, is rooted in the way in which it was developed: The fighter jet is being mass-produced and placed in the hands of military aviators such as Walsh, who are not test pilots, while the aircraft remains a work in progress. Millions more lines of software code have to be written, vital parts need to be redesigned, and the plane has yet to complete 80 percent of its required flight tests. By the time all that is finished — in 2017, by the Pentagon’s estimates — it will be too late to pull the plug. The military will own 365 of them.

By then, “we’re already pregnant,” said Air Force Lt. Gen. Christopher Bogdan, who oversees F-35 development for the Pentagon.

March 7, 2013

QotD: When bureaucrats have to cut back

Filed under: Bureaucracy, Government, Quotations — Tags: , , — Nicholas @ 00:01

Back in my teaching days, many years ago, one of the things I liked to ask the class to consider was this: Imagine a government agency with only two tasks: (1) building statues of Benedict Arnold and (2) providing life-saving medications to children. If this agency’s budget were cut, what would it do?

The answer, of course, is that it would cut back on the medications for children. Why? Because that would be what was most likely to get the budget cuts restored. If they cut back on building statues of Benedict Arnold, people might ask why they were building statues of Benedict Arnold in the first place.

The example was deliberately extreme as an illustration. But, in the real world, the same general pattern can be seen in local, state and national government responses to budget cuts.

At the local level, the first response to budget cuts is often to cut the police department and the fire department. There may be all sorts of wasteful boondoggles that could have been cut instead, but that would not produce the public alarm that reducing police protection and fire protection can produce. And public alarm is what can get budget cuts restored.

Thomas Sowell, “Will Obama turn the United States into the world’s largest banana republic?”, Washington Examiner, 2013-03-04

March 2, 2013

A 2% budget cut should not impact day-to-day services

Filed under: Bureaucracy, Government, Politics, USA — Tags: , , , — Nicholas @ 10:04

In the Washington Times, Gary Johnson looks at the wild claims about what the sequester will do to the services Americans receive from the federal government:

To listen to the parade of Obama administration officials warning of civilization-ending consequences from the measly $85 billion in spending “cuts” sequestration will bring, one can only reach one of two conclusions: Either they are just making stuff up to make the cuts as painful as possible, or the federal budget is so out of control that a mere 2.4 percent reduction in projected spending is more than the system can handle.

Frankly, it is both. Absolutely, in their zeal to make Republicans pay the maximum political price for what is actually both parties’ fault, it is almost comical to watch one Cabinet official after another step up to the microphone and tell us that a 2.4 percent reduction (that isn’t really a reduction) will cause airplanes to fall out of the sky, our national defense to be disabled and our children to starve. That game is among the oldest in Washington. Cut the Park Service budget, and suddenly they can’t find the money to keep the Lincoln Memorial or Yellowstone open.

This sideshow is entertaining, but it misses what may be the most important lesson to be learned from this sequester debacle. While there is certainly a heavy dose of Chicken Little falling-sky rhetoric coming out of the bureaucracy, it is probably true that the rather indiscriminate sequester formula is presenting some challenges for some agencies.

[. . .]

If “cutting” discretionary spending by a lousy 2 or 3 cents on the dollar is enough to create dire consequences (for the sake of argument), imagine what would happen if we tried to reduce that spending by the 30 cents it will take to balance the budget and stop digging ourselves even deeper into unsustainable debt.

March 1, 2013

Sequester nightmare: “The administration has every incentive to make the sky fall, lest we suffer that terrible calamity — cuts the nation survives”

Filed under: Government, Media, Politics, USA — Tags: , , — Nicholas @ 10:19

Charles Krauthammer on the differing aims of the President and the congressional Republicans over sequestration:

“The worst-case scenario for us,” a leading anti-budget-cuts lobbyist told The Washington Post, “is the sequester hits and nothing bad really happens.”

Think about that. Worst case? That a government drowning in debt should cut back by 2.2 percent — and the country survives. That a government now borrowing 35 cents of every dollar it spends reduces that borrowing by two cents “and nothing bad really happens.” Oh, the humanity!

A normal citizen might think this a good thing. For reactionary liberalism, however, whatever sum our ever-inflating government happens to spend today (now double what Bill Clinton spent in his last year) is the Platonic ideal — the reduction of which, however minuscule, is a national calamity.

Or damn well should be. Otherwise, people might get the idea that we can shrink government, and live on.

Hence the president’s message. If the “sequestration” — automatic spending cuts — goes into effect, the skies will fall. Plane travel jeopardized, carrier groups beached, teachers furloughed.

The administration has every incentive to make the sky fall, lest we suffer that terrible calamity — cuts the nation survives. Are they threatening to pare back consultants, conferences, travel and other nonessential fluff? Hardly. It shall be air-traffic control. Meat inspection. Weather forecasting.

Update: Mark Steyn was a guest on the Hugh Hewitt show the other day to talk about this:

I’m not big on those Mayan guys, but those Mayan guys only hold an apocalypse every few thousand years. Washington now has a Mayan apocalypse every six weeks, whether it’s the fiscal cliff or the debt ceiling, or now the sequestration. And as you say, it’s talking about $44 billion dollars, or about what the United States government borrows, borrows every nine days, every nine days. So in other words, we’ve just spent weeks talking about nine days’ worth of borrowing, which in any eventual deal isn’t actually going to be saved anyway, because the latest deficit reduction bill actually increases the deficit, because that’s just the way Washington works.

[. . .]

Yeah, and you know what’s crazy about this is that let’s pretend that the officials who are speaking on this, the cabinet secretaries who are coming out and telling us that the world will come to an end tomorrow, that the planes are going to be dropping from the skies, that our infants and seniors are going to be dying untended in hospitals, that your shower head is going to be blasting out fecal coliform on you in the morning, that all of this is going to be happening just for his hypothetical $40 billion dollars of so-called entirely phony sequestration cuts, now assuming they’re not just lying to us. They’re basically telling us that nothing can ever be done about Washington spending ever. If $40 billion of hypothetical cuts means that the planes are dropping from the skies, and Obama’s even cancelled the deployment of a carrier to the Gulf, you know, in other words, when the Iranians go nuclear, he’ll be able to say oh, I would have stopped that, but we were all tied up with the sequestration. Sequestration is what allowed the mullahs to go nuclear. If that’s true, nothing can ever be done about anything ever, and Washington might as well just close up and go home.

February 27, 2013

Parliamentary Budget Officer conducting “constitutional vandalism”

Filed under: Cancon, Government, Law, Media — Tags: , , , , — Nicholas @ 11:58

Senator Anne Cools is displeased by the PBO’s ongoing legal and media campaign against the Federal government:

An independent senator says the parliamentary budget watchdog, Kevin Page, overstepped his mandate by taking the government to court in a battle for spending figures, and the Senate should force Page to withdraw the legal proceedings.

In a speech to the Senate Tuesday, Sen. Anne Cools argued that Page’s regular comments to reporters and more recent comments to his international counterparts about his battles with the government over spending figures were “provocative and inflammatory public statements” that are “intolerable and unacceptable.”

Page’s actions, Cools argued, were tantamount to contempt of Parliament, were a breach of parliamentary privilege and were affecting the Senate’s credibility to carry out its functions.

“Contemptuous and un-parliamentary,” she said of Page’s actions and comments, “they are constitutional vandalism.”

“They are inappropriate conduct from a Library officer under the direction of the Speakers of the Senate and the House of Commons. This Senate cannot accept this and should take some ‘shock-no-more’ actions.”

Sequestration and the defence budget

Filed under: Military, Politics, USA — Tags: , , , — Nicholas @ 09:10

At the Cato At Liberty blog, Christopher Preble graphically refutes the notion that sequestration will automatically weaken the US military:

Click to see full-size infographic at the Cato Institute blog.

Click to see full-size infographic at Cato At Liberty.

Military spending will remain at roughly 2006 levels — $603 billion, higher than peak U.S. spending during the Cold War. Meanwhile, we live in a safer world. The Soviet Union has been dead for more than two decades; no other nation, or combination of nations, has emerged since that can pose a comparable threat. We should have a defense budget that reflects this reality.

To be clear, sequestration was no one’s first choice. But the alternative — ever-increasing military spending detached from a legitimate debate over strategy — is worse. We should have had such a debate, one over the roles and missions of the U.S. military, long before this day of reckoning. And politicians could have pursued serious proposals to prudently reduce military spending. Instead, they chose the easy way out, avoiding difficult decisions that would have allowed for smarter cuts.

Update: Nick Gillespie explains why you shouldn’t worry too much about the sequester:

Update, the second: Putting the actual numbers in perspective:

February 26, 2013

Budget cutting gets real in Ottawa

Filed under: Cancon, Government — Tags: , — Nicholas @ 11:11

David Akin tweeted some news about upcoming budget cuts for various Canadian government agencies:

February 23, 2013

Provincial budgets range from less-than-accurate to verging on financial fraud

Filed under: Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 10:43

Andrew Coyne, after a short diatribe about our first-past-the-post electoral system (he’s agin’ it), gets down to brass tacks about provincial finances:

As bad as the federal government is, the provinces are worse. And as horrendous as the provinces are generally, the record in some provinces borders on the fraudulent. Saskatchewan and Alberta, for instance, have overspent their budgets in the past decade by an average — an average — of nearly 5%. And since each year’s overshoot becomes the baseline for next year’s budget, the cumulative impact is to produce spending, in the fiscal year just ended, vastly larger than was ever specifically authorized in advance: in Saskatchewan’s case, nearly 40% larger.

That’s as best the [C. D. Howe Institute] can make out. Provincial accounting is notoriously haphazard and inconsistent. Not only does each province use its own rules and procedures, making it impossible to compare the public accounts from one province to another with any confidence, but in several provinces — Newfoundland and Quebec are the worst offenders — the public accounts are not even stated on the same basis as the budget.

And while the public accounts must ultimately prevail, efforts to reconcile the two sets of figures, and to explain the discrepancies, remain spotty. In some provinces — Quebec, Saskatchewan, British Columbia — auditors have refused, repeatedly, to sign off on the books without attaching reservations.

So not only can voters have little confidence that governments will spend what they said they would, they can have little ability even to reckon how much they overspent, or to compare their own province’s performance with the others’. All in all, a thoroughly disgraceful performance. (Honourable exceptions: Ontario and Nova Scotia, though voters in both provinces have other reasons to doubt their governments’ fiscal candour.)

“The sequester’s ‘meat-cleaver approach’ of ‘severe,’ ‘arbitrary’ and ‘brutal’ cuts will ‘eviscerate’ education, energy and medical research spending”

Filed under: Bureaucracy, Economics, Government, USA — Tags: , , , , , — Nicholas @ 10:19

Head for the hills! The sequester is coming!

As in: Batten down the hatches — the sequester will cut $85 billion from this year’s $3.6 trillion budget! Or: Head for the storm cellar — spending will be cut 2.3 percent! Or: Washington chain-saw massacre — we must scrape by on 97.7 percent of current spending! Or: Chaos is coming because the sequester will cut a sum $25 billion larger than was just shoveled out the door (supposedly, but not actually) for victims of Hurricane Sandy! Or: Heaven forfend, the sequester will cut 47 percent as much as was spent on the AIG bailout! Or: Famine, pestilence and locusts will come when the sequester causes federal spending over 10 years to plummet from $46 trillion all the way down to $44.8 trillion! Or: Grass will grow in the streets of America’s cities if the domestic agencies whose budgets have increased 17 percent under President Obama must endure a 5 percent cut!

The sequester has forced liberals to clarify their conviction that whatever the government’s size is at any moment, it is the bare minimum necessary to forestall intolerable suffering. At his unintentionally hilarious hysteria session Tuesday, Obama said: The sequester’s “meat-cleaver approach” of “severe,” “arbitrary” and “brutal” cuts will “eviscerate” education, energy and medical research spending. “And already, the threat of these cuts has forced the Navy to delay an aircraft carrier that was supposed to deploy to the Persian Gulf.”

“Forced”? The Navy did indeed cite the sequester when delaying deployment of the USS Truman. In the high-stakes pressure campaign against Iran’s nuclear weapons program, U.S. policy has been to have two carriers in nearby waters. Yet the Navy is saying it cannot find cuts to programs or deployments less essential than the Truman deployment. The Navy’s participation in the political campaign to pressure Congress into unraveling the sequester is crude, obvious and shameful, and it should earn the Navy’s budget especially skeptical scrutiny by Congress.

The Defense Department’s civilian employment has grown 17 percent since 2002. In 2012, defense spending on civilian personnel was 21 percent higher than in 2002. And the Truman must stay in Norfolk? This is, strictly speaking, unbelievable.

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