Category: Money
Krugman warns: uh-oh Canada
Nobel prize-winning economist and New York Times columnist Paul Krugman did some research before a visit to Canada, and found disquieting signs.
His conclusion:
I’m not making any predictions here, just noting that if we go beyond banking to ask about household balance sheets and risks thereto, things up north bear watching.
Hint: Read the comments, too.
Hat tip: Tim Bousquet
MLAs’ pay and public begrudgery, redux
Back on February 15, Contrarian had the temerity to opine that the MLAs’ expense scandal was pretty small potatoes—more a matter of public begrudgery than actual wrongdoing. This evoked private expressions of appreciation and gratitude from MLAs and political aides of all parties—and howls of indignation from readers (here, here, and here).
Events swiftly made my apologia seem naively over-generous. Two MLAs resigned, a third was kicked out of government caucus, and Premier Darrell Dexter, who built his career on his seemingly perfect ear for public sensibilities, turned suddenly, stubbornly, and uncharacteristically tone-deaf when his own personal expenses fell under scrutiny.
Much of what I said remains true and warrants repeating.
- It’s invidious to conflate legitimate expenses for riding offices, and travel to and from Halifax, with salary, and call it all “compensation.”
- The circumstances of individual MLAs — remoteness from Halifax, size of riding, local culture of constituent service, committee duties — are almost infinitely varied. Any set of rules governing expenses will necessarily be arbitrary, and will beget examples that seem unreasonable.
- MLAs incur many expenses that are not receiptable They are hit up constantly for donations, gifts, handouts.
And:
The public nurses an attitude of begrudgery toward politicians, and the media fans these embers at every opportunity. This is not our most attractive quality, and it makes it almost impossible for MLAs — who by definition must set their own salaries — to pay themselves appropriately for the work they do. So MLAs have, unwisely but understandably, developed a variety of secretive ways to pad their allowances.
All true, I still think. But I should have remembered Jeremy Bentham’s famous maxim:
In the darkness of secrecy sinister interest, and evil in every shape, have full swing. Only in proportion as publicity has place can any of the checks applicable to judicial injustice operate. Where there is no publicity there is no justice.
It should not have surprised anyone, least of all Contrarian, that sinister interest had flourished in the darkness of secrecy. It certainly didn’t surprise my readers, though it did infuriate them.
A few days after I posted my comments, Dexter’s maladroit handling of his own financial transgressions became the focus of the story. Word leaked out that taxpayers had been unknowingly footing the $3500 annual bill for his Barristers’ Society dues. The premier sought to justify this practice by asserting that the late Tory House Leader Michael Baker, also a lawyer, had suggested the arrangement, as if good-ole-boy bipartisanship would make it all OK.
When this didn’t fly, Dexter grudgingly agreed to stop charging us for his fees, but declined to pay back money he already collected. And just by the way, now that he was picking up his own tab, a switch to inactive status, at $250 per year, seemed in order.
NDP insiders were privately chagrined at the brand damage caused by this cluelessness, and relieved when attention shifted to the almost comically sordid details of Trevor Zinck’s alleged financial misadventures. In Zinck’s case, for once, the party got out in front of the story, ousting him from caucus before the news broke.
A coda to the scandal played out on the last day of the session, when the media drew Dexter into speculating about whether the Auditor General Jacques Lapointe would or should name any MLA transgressors fingered in his soon-to-be-released forensic audit. Opposition leaders Stephen McNeil and Karen Casey had no trouble fielding this softball, forcing Dexter to reassemble the press corps for a clarification: He was in favor of naming names after all. Stay tuned.
The continuing saga has deepened already extravagant public cynicism about politicians, and sapped the New Democrats’ hard earned credibility as idealists. Both are sorry developments, in my lonely view. Our politicians face an array of issues requiring unpopular decisions, and it doesn’t help that so many citizens regard them as scoundrels.
[AllNovaScotia.com's Brian Flinn deserves credit for pursuing this story for months before the Auditor General hit pay dirt. And a hat tip to Nelson MacDonald, who challenged me to revisit this topic.]
Infographics: miles driven by price of gas
Hannah Fairfield of the New York Times plots the number of miles driven by US drivers, both private and commercial, against the retail price of gasoline from 1956 to February, 2010. The horizontal axis represents miles driven, while the vertical axis shows the price per US gallon (3.79 litres) in current US dollars. The drawn path represents the passage of time.
Note that sharp spikes in gas prices coincided with reductions in miles driven in 1973, 1978, and from 2005 to 2010. Click here for a larger image with interesting subgraphs and embedded commentary.
How to apologize – corporate edition
We’ve read a lot lately about the value of swift, full, and forthright apologies when public figures screw up. What about companies that screw up?
Blippy is a website that lets users trade updates about their consumer purchases. Recently, an obscure programming error, compounded by mistakes at Google and one small midwestern bank, allowed Google to index the credit card numbers of four or five Blippy customers, potentially exposing these numbers to people browsing the web. Co-founder & CEO Ashvin Kumar’s apology to users could serve as a model for companies that find themselves in a similar pickle. Moneyquote:
It has been a rocky weekend for Blippy. The weekend began with a front page article in the New York Times announcing our Series A financing. The elation didn’t last long. A few hours later, reports surfaced about the discovery of credit card numbers within Google’s cached search results. Our mood quickly went from elation to disbelief to disappointment. We are very sorry.
However, this is a very serious issue and simply apologizing is not enough. We’ve spent the last 48 hours working around the clock to dissect the issues, reach out to affected users, and put together a plan to ensure this never happens again.
There followed a detailed, plainspoken, 1000-word explanation of exactly what went wrong, and the steps Blippy and Google took to fix the problem. The explanation is admirably devoid of weasel words or any attempt at evading responsibility. It neither grovels nor glosses over. By treating customers with respect, it inspires reciprocal respect for the company at an awkward time.
Customers do not expect perfect products and perfect service. Their loyalty (or hostility) to a brand arises in large measure from the way a company responds to problems that inevitably arise. A willingness to listen to customers, an ethic of candor in dealings with them, and an honest determination to put things right—companies that get those three things right will enjoy excellent customer relations.
Pomplamoose
Two weeks ago, Contrarian featured a exceptionally funny and creative YouTube video by two dorky techno musicians from Leeds, comprising two-thirds of the Brett Domino Trio. I didn’t say so at the time, but these guys strike me as worthy 2010 inheritors of the 1960s folk revival. They make their own music, using an assortment of real and pseudo instruments. They exemplify the indie knack for using the Internet to bypass industry middlemen en route to fans (and, potentially, a living).
Here, thanks to James Fallows, is a similar but even more successful YouTube group, Pomplamoose, covering the sublime Chordettes hit, Mr. Sandman:
Pomplamoose doesn’t have a record company or a publicist, and has never produced a CD, but some of their YouTube videos have been viewed four million times. They’re making a nice little living* selling MP3s on their website and on iTunes. In an interview with National Public Radio, bandmates Jack Conte and Nataly Dawn explained the rules underlying the genre.
“There’s no hidden sounds, there’s no lip-synching, there’s no overdubbing. What you see is what you hear,” Conte says. “Sometimes, there might be two or three Natalys harmonizing with herself, and then you’ll see those three videos juxtaposed together on the screen.”
“I guess I kinda don’t like how there’s such a pedestal for music culture and especially for band culture,” he says. “It just feels fake; it feels like smoke and mirrors. I feel like music doesn’t have to be like that. It can be something that’s very normal and very accessible.”
According to Dawn and Conte, the process of creating a song, shooting and editing a video, and posting it on YouTube only takes about a week. The duo buys mechanical licenses for all of its covers online, which is a quick and easy process.
“That’s the thing,” Dawn says. “People think that all of these things have to be done by geniuses behind huge desks or at the top of skyscrapers, but you can just go online and do it yourself.”
“If you can’t just do … the production, the instruments and everything all by yourself, then you do need help. That’s something that labels are really good at,” Dawn says. “If, for example, you’re somebody who writes songs, like Lady Gaga, and you need everything that’s gonna make you Lady Gaga, YouTube’s not gonna be able to do that. You need a big fat label. But if you’re just a band, I don’t think we’re in an era anymore where you need that sort of major backing.”
–
* It can’t have hurt that Toyota tapped Pomlamoose’s Sandman cover for an Avalon ad.
That suppressed gambling report – update
A source I trust tells me the consultant’s report on gambling Labour Minister Marilyn More won’t release truly is substandard. Let’s assume that’s the case, and More was right to reject it after many attempts to get the contractor to fulfill the his obligations. Barring public access to the report is still the wrong thing to do.
In effect, Minister More is saying interested Nova Scotians aren’t sophisticated enough to understand or evaluate the report. It might cause them “anxiety” and “confusion.” Such matters should presumably be left to their betters—people like More, and the Gambling Corp. honchos who talked her into this foolish course (and won’t even let her commission another study).
Is this really how Nova Scotia’s first NDP administration wants to govern?
Liberal critic Leo Glavine has the sensible answer to More’s patronizing stand: Release the report to anyone who requests it, together with a detailed account of its deficiencies.
Comforting the unafflicted
Former reporters turn up in the darndest places. Alan Jeffers, erstwhile ink-stained wretch for the Chronicle-Herald and Canadian Press, turned up this week on the website of Mother Jones, the “smart, fearless” left-wing American magazine once edited by Michael Moore. Jeffers was defending his current employer, the world’s largest publicly traded oil company, from claims in both MoJo and Forbes Magazine, a rather more conservative journal, that it paid no US income tax in 2009 despite earnings of *cough* US$19.3 billion. And a fine job he did.
In case you were wondering, $19.3 billion is enough to put a new Cadillac in every driveway in Nova Scotia. Taxes included this time.
Hat tip: CH
The hidden cost of 4-way stops
Gary Lauder calculates the wasted fuel and time caused by one intersection’s stop signs at $100,000 per year. Roundabouts work better, but how about a “Take Turns” sign?
Hat tip: Crest Halifax.
iStakes
April 3: Is this the transient alcoholic flicker on a too sweet rum cake, or a nuclear flash that will mark April 3 as a milestone we’ll observe 20 and 40 years from now?
According to David Pogue and Leo LaPorte, techies are scornful and users are awestruck, in which case, the smart money will be on the users.
But there’s a big problem. To some, Jobs and Apple are a modern version of Bauhaus: elegant utilitarian design with fascist undertones. Apple’s singular control over what media its machines can play, and what machines can play its media, represents a giant backward leap for computing, insist John Battelle and many others.
Google, of course, is going the other way, putting its apps in the cloud, and inviting everyone else to put theirs in the cloud too.
For Canadians, this resembles nothing so much as the time, a decade and a half ago, when Kenneth Thompson bet on content, and Conrad Black bet on dead trees. Only one of them is in prison.
The developers praise their own work in a slightly saccharine video here; the editors of WIRED show how it will work as a pretty cool magazine here. Unvarnished video ad here.
MLAs’ pay and public begrudgery – yet more feedback
Previous installments here, here, and here. A longish dissent from reader Jay Wilson:
The way you make it sound, we, the public, are the ones who indirectly caused this problem by forcing our poor beleaguered elected representatives underground and into making the kinds of reckless spending judgements they made. I take issue with that.
As you said in your blog, “Upon taking office, most MLAs set aside established careers in exchange for a job with far less security than comparable positions in the private or public sector.” That once was the case, for a good reason. Once upon a time, MLAs made very little money as elected representatives. To offset their costs of travel, constituency responsibilities, etc, they were given expense money. Fine.
Then more people from different walks of life started getting involved in politics who didn’t necessarily make as much as the usual assortment of doctors, lawyers and businesspeople who had mostly made up the elected ranks. Not to mention the complaints from the very sorts of individuals you referenced: People from higher-paying occupations who said it wasn’t enough to live on and they could make more in the private sector.
Over time, a new sensibility developed along the lines of “Let’s pay them a better salary so that they can afford to live while serving our best interests.” In the interests of fairness, the thought occurred to some that the money spent on expense accounts and the like could be decreased as now these elected officials would actually be making more. That’s not what happened.
In fact, as salaries continued to increase, so did money for expenses and then it diversified into a whole host of different expense categories. MLAs were getting money for everything and the kitchen sink, and who made these changes? Who increased their salaries and expense money? Who made the rules so deliberately ambiguous and full of holes so wide you could drive a tank through them? They did, behind closed doors and in quick legislative motions, with cursory mentions in the local press for the most part.
Please don’t try to excuse MLAs for their sorry behaviour. This is about three things: A pronounced sense of entitlement, a disconnect from reality and pure abject greed. Maybe it isn’t on the same scale as the scandals in Britain and even Newfoundland, but those three things are present in each situation and they are things we should all be vigilant against.
