Category Archives: Economy

Oct 09 2013
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Economy, Education, Employment

When Johnny can’t read, we all suffer

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Some in New Brunswick (mostly politicians) will characterize rising or stable grade school enrolments in the province’s urban south in the vaguely encouraging ways one does when happy appearances mask troubling truths.

Is it heartening that, in a jurisdiction where outmigration among the young threatens to rend the social and economic fabric, classroom head counts are up, especially in the Francophone system?

Do we care that they come at the expense of the rural north, where communities are steadily emptying? At least, the number of bums in seats from Moncton to Fredericton to Saint John, is increasing. That ought to count for something. Oughtn’t it?

Of course, apart from this statistical shuffling of human capital from one region of the province to the other, what matters most is the education of these fresh-faced scholars during their academic sojourn. And in this regard, alone, no one in New Brunswick has cause for any degree of sanguinity.

The news from the Organization for Economic Co-operation and Development’s (OECD) most recent study on literacy, numeracy and skills is in. And, for New Brunswick, the news is not good. In fact, it’s plain awful.

Though Canada, overall, scored just above the OECD mean for 22 countries in reading ability (and just below in problem solving), New Brunswick ranked below in both categories. What’s more, the think tank observes a widening gap between those who can and those who cannot read in this country:

“Canada has a higher proportion of its population at the highest and lowest levels in literacy. Fourteen percent of Canadians score at Level 4 or 5, meaning that they can undertake tasks that involve integrating information across multiple dense texts and reasoning by inference. This places Canada above the OECD average of 12 per cent, along with Japan (23 per cent), Finland (22 per cent), the Netherlands (19 per cent), Australia (17 per cent), and Sweden (16 per cent).

“At the other end of the scale, 17 per cent of Canadians score at Level 1 or below. Of these, 13 per cent score at Level 1: These individuals have skills that enable them to undertake tasks of limited complexity, such as locating single pieces of information in short texts in the absence of other distracting information. The remaining 4 per cent, categorized as ‘below Level 1,’ do not command these skills. They demonstrate only basic vocabulary, as well as the ability to read brief texts on familiar topics to locate a single piece of specific information. The OECD average for Level 1 or below is 15 per cent.”

As New Brunswick hovers near the bottom of the Canadian results, the literacy gap in this province is, presumably, more pronounced than in many other parts of the country.

All of which has rung the alarm bell for educators and literacy workers here.

“We continue to have over 50 per cent of the New Brunswick population below a Level 3 literacy level, which we consider to be a high school equivalency,” the Literacy Coalition of New Brunswick’s Natasha Bozek told the Telegraph-Journal on Tuesday.

Added Patrick Lacroix of Elementary Literacy Inc. in the same article, “There is a huge amount of work ahead of us. Yes, the schools are making a lot of effort focused on literacy. But it takes the community to stress the importance of tackling the problem and to get as many people as possible involved in this movement for change.”

He’s right. The figurative village that raises the child must also teach him how to read and do math both in and out of the classroom. This requires a cultural shift in attitudes about learning – a basic acknowledgement that these hard skills are simply and permanently fundamental to a prosperous economy and effective labour force.

Is it a coincidence that nations, such as Japan and Finland, which boast comparatively high literacy and numeracy rates are also among the world’s most innovative (if not always the most economically robust).

In the end, it’s not the number of heads in New Brunswick schools that matter.

It’s what’s in them.

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Oct 03 2013
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Economy

A gentle and timely appeal to reason

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To some in New Brunswick, he will appear as a beacon of enlightenment. To others, he will seem no more inspiring than any other pragmatist. But Ernie MacKinnon’s real distinction may be that he is the first resident of this province to openly repudiate his private interests in favour of the broader public’s.

In a long, though articulate, commentary, along the “ask-not-what-your-country- can-do-for-you” vein, published by the Telegraph-Journal this week, Mr. MacKinnon – a former Deputy Minister and first CEO of the New Brunswick Investment Management Corporation – explains why he has changed his mind about pension reform in the province. It wasn’t an easy decision, he explains. But it was a necessary one.

“When the issue of major reforms to the pension regime for public servants first burst into the public’s consciousness. . .my initial response was anger,” he writes.

Then, “At some point, the reality of what is coming forced me to look more objectively at the facts and important trends. . .After much research, listening, and thought, I now see the value and the urgency of many – but not all – of the proposed pension reforms.”

It is an astonishing admission, as rare as snow in July, in a province that has become inured to bad economic news, yet wedded to its various and costly entitlements. And it is not calculated to win him any friends over at the New Brunswick Pension Coalition, for which he has consulted, and which is planning to haul the government into court over its decision to move to a shared-risk approach to managing the retirement savings of former civil servants.

Still, as Mr. MacKinnon states, “Make no mistake, if I thought it were possible, I too would insist to have our pension contract honoured. However, I have reached the conclusion that if measures are not taken today and should potential risks become reality down the road, the implications for pensioners will be even worse.”

The former bureaucrat’s comments point to the grim truth about public pensions just about everywhere in Canada. They were crafted at a time in the nation’s history when the future looked much brighter than it does today. The pay-it-forward model – in which the existing generation of public workers essentially contributes to the retirement well being of future ones as it relies on the beneficence of past ones – is, for all practical purposes, broken.

In New Brunswick – where the annual deficit is nudging $500 million on a structural debt of nearly $12 billion – the unfunded liability in public pensions is perilously large. Indeed, the “flaws” in the plan, Mr. MacKinnon observes, are clear to see. They “arise from increases in member lifespans, a spate of costly early retirement schemes and sometimes inadequate sponsor and member contributions.”

And while returns over the past few years have been higher than anticipated, the fund “still has a substantial deficit because the liability side of things has been deteriorating faster.”

Mr. MacKinnon doesn’t let the government off the hook entirely. He wants elected officials to mitigate worries that base benefits will be cut. He also wants them to “make provisions” to soften the blow of cost of living adjustments in the initial years. Meanwhile, he insists that those who manage the fund truly know their business. “Thirdly,” he writes, politicians “must ensure, in legislation, that pension funds are managed here in the province, to the greatest degree possible, by our own people at NBIMC (New Brunswick Investment Management Corp.) to minimize costs and ensure control of risks.”

All of which is eminently reasonable. But there’s more to this.

Mr. MacKinnon’s essay addresses questions that extend far beyond the pension debate. He reminds us that New Brunswick is, in fact, a “village” and that its citizens owe one another an obligation of mutual indulgence – that “we must all contribute to the resolution of the challenging issues we face today.”

Beacon or pragmatist?

Let us hope that Mr. MacKinnon is, at least, a trend-setter.

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Oct 01 2013
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Economy, Government, Politics

From less government to no government

Fences make good neighbours and poor legislators

Fences make good neighbours and poor legislators

The Commander-in-Chief was in no mood to dance when he declared, on Monday, “One faction of one party, in one house of Congress, in one branch of government doesn’t get to shut down the entire government just to refight the results of an election.”

Indeed, he roared, “You don’t get to extract a ransom for doing your job.”

The observation was, at once, brilliantly conceived and utterly incorrect.

At the stroke of midnight, despite Barack Obama’s imprecations, the U.S. government did shut down (everything but essential services, such as the army, energy grid and air traffic control) because a mewling bunch of far-right-wing crybabies in the Republican Party can’t take no for an answer.

Even so, the journey to ignominy is not yet over.

On October 17, Congress faces another battle, the consequences of which could be far worse than this present contretemps over the government’s spending authority: whether or not to raise the nation’s debt ceiling. Not doing so would inevitably lead to the United States defaulting, for the first time in its history, on its financial obligations.

Canadians might be amused to imagine that this begins and ends with health care reform, also known as “Obamacare”. Simply put, Republican tea party Representatives despise it and will do everything in their power to “defund” it.

They don’t have a chance, as the most important bits of the new law have already passed in Congress and been endorsed by the U.S. Supreme Court. But that’s not stopping this bunch – the most bloody-minded cohort of rank politicians in modern times. As Michael Gerson, an opinion writer for The Washington Post, observes, “Few believe any longer that Republicans will be able to defund Obamacare in this session of Congress; it is the fight that counts. This is a word that crops up frequently in tea-party discourse. Not winning. Not strategy. Not consequences. The fight.”

In fact, this is where the rubber truly hits the road, and where Canadians will want to stifle their giggles. The conflict is only titularly about Obamacare. At its roots is a fundamentally radical conception of government, itself – one that’s counterpoised to mainstream Democratic and Republican political values; one that actually finds little purchase on most main streets of America.

Teaparty.org articulates its “15 non-negotiable core beliefs” thusly:

“Illegal aliens are here illegally; pro-domestic employment is indispensable; a strong military is essential; special interests must be eliminated; gun ownership is sacred; government must be downsized; the national budget must be balanced; deficit spending must end; bailout and stimulus plans are illegal; reducing personal income taxes is a must; reducing business income taxes is mandatory; political offices must be available to average citizens; intrusive government must be stopped; english as our core language is required; and traditional family values are encouraged.”

There’s nothing especially alarming to a “liberal” mind about most of this creed. But, it is in the practice of it – the widely varied interpretation of it – when trouble brews.

As often as not, tea partiers view capitalism not as an economic system, but as an ethical imperative and to justify their position they love quoting Ayn Rand, who wrote, in 1962, “The world crisis of today is a moral crisis – and nothing less than a moral revolution can resolve it: a moral revolution to sanction and complete the political achievement of the American revolution. We must fight for capitalism, not as a practical issue, not as an economic issue, but, with the most righteous pride, as a moral issue. That is what capitalism deserves, and nothing less will save it.”

In this conception of the cosmos, government – which, by its function, takes and distributes wealth to provide for the common interest – is a dangerously corruptible institution and must be stripped of most of its power to do harm (i.e. spending).

Such hardline thinking precludes any possibility of negotiating with mainstream or traditional politicians. It also suggests that a dysfunctional Congress will only hinder the administration of foreign diplomacy and economic policy.

Ultimately, when the U.S. pays a ransom to the tea party, at least some of the cost will be born by its trading partners, including Canada.

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Oct 01 2013
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Demographics, Economy, Politics

Sticking out our economic chin

Oh yeah, baby, we are stuck where the sun don't shine

Oh yeah, baby, we are stuck where the sun don’t shine

Of course, precisely 11 months before the next provincial election in New Brunswick, the urgent conversation would have to shift, the channel change, the page turn. After all,  there’s only so much bad news one person can digest before he succumbs to the hallucinogen of wishful thinking.

Now, the question for all to ponder is whether we are, at base, a glass-half-empty or a glass-half-full kind of folk. And in so doing, the campaign slogans of yore will no longer suffice. We will no longer respond to heady promises of prosperity any more than we will believe desperate warnings of imminent penury.

Right down the middle, between all possible extremes of human circumstance, is where we are and where we want to stay. The political party that understands the true power of self-delusion will win the day, as it brands its march to the ballot box with a few, well-chosen words: “Hey, here in New Brunswick, it could be worse.”

The province’s annual deficit is now projected to reach $499.9 million by the end of fiscal 2013, the result of lower-than-expected revenue. “That’s due mainly to weaker than anticipated results from NB Power,” Finance Minister Blaine Higgs told reporters last week. “We’ve had this information on the first quarter for a few weeks but we were intending to be able to line it up to the year-end results from last year.”

As for the three-month period ending this month, he’s no more sanguine: “We’ve seen some signs of growth in sectors like in the forestry sector, but I’m not expecting a huge uplift in revenue for the second quarter.”

Cheer up, though: .

“If we had not made that decision (to cut government spending) early on, looking at the continued economic performance and the issues of revenue, we as a province would be in very dire straits,” Premier David Alward reassured the press corps.

Unsaid, but implicit, was the proposition that a province of 756,000 souls, with an annual lien of half-a-billion bucks and a structural long-term debt approaching $12 billion, is not, technically speaking, in dire straights. Clearly, Mr. Alward’s definition of the word ‘dire’ departs somewhat from the Fraser Insititute’s, which concluded in April, “It’s hard to deny that New Brunswick’s finances are in a dire state.”

Indeed, wrote the Vancouver-based think tank, “The province has splashed red ink every year since 2008/09. . .With the provincial government persistently spending beyond its means, New Brunswick’s net debt (financial liabilities minus assets) is set to dramatically increase from a recent low of $6.7 billion in 2006/07 (25.4 per cent of GDP) to $11.6 billion in 2013/14 (34.2 per cent).”

On the other hand, that’s just the Fraser Institute: Always raining on everyone’s parade. Should we more properly worry that we continue to lose the tax base we need to get our finances shipshape and Bristol fashion?

This week, Statistics Canada reported that New Brunswick shed 947 people during the 12-month period ending July 1, 2013. Michael Haan, a population expert at the University of New Brunswick, told the Telegraph-Journal, “I would estimate we will see year-over-year declines for the next five years or so. We are at a point in history where we have a large group at the age of migration. The baby boomers’ children are between 15 and 30 now. The prime year for moving is around 28.”

Again, however, it could be worse. The year before, New Brunswick lost more than 2,000 people to better jobs and rosier opportunities in Ontario and Alberta. Besides, at least we’re not Greece or even Spain where, as Bloomberg Businessweek reported in June, “The nation’s population fell last year for the first time since records began in 1971, and the main reason was an 18 per cent increase in the number of foreign nationals leaving the country. Romanians, Moroccans, and Ecuadorians led the way out.”

Rest assured, gentle reader, all is not woe in New Brunswick.

In fact, given our stubbornly sunny disposition, it’s remarkable we’re not all on skid row.

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Sep 22 2013
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Economy, Energy, Environment, Oil and Gas

Our increasingly dull song of praise for oil

You can just smell the methane

You can just smell the methane

One public page of the member-driven website, Geo-Help Inc., which bills itself as “The Virtual Geology Department providing Geological Expertise and Services to the Oil and Gas Industry in Canada,” offers a collection of quotes that reaffirms man’s (though, interestingly, not even one woman’s) abiding love affair with liquid, black gold down through the decades.

Odes have been written to exalt the substance, including this one, sponsored by Seneca Oil and published in 1850:

“The healthful balm, from Nature’s secret spring/ The bloom of health, and life, to man will bring/ As from her depths the magic liquid flows/ To calm our sufferings, and assuage our woes.”

Others, like Kansas geologist Wallace Pratt (1885-1981), also recognized the allure when he said, “Where oil is first found is in the minds of men.” Men, presumably, like American industrialist J. Paul Getty (1892-1976) who once declared that his formula for success was to “rise early, work hard, strike oil.”

The quotes are not uniformly laudatory. One describes oil as “the excrement of the devil.” Another complains, “You can’t get the grease without a lease.”

And some are way off the mark, as is one attributed to the Director of Anglo Persian Oil Company who, in 1926, observed, “Saudi Arabia appears devoid of all prospects for oil.”

Historically, though, our preoccupation with the stuff has been, until quite recently, laced with positive connotations. And this strikes me as somewhat paradoxical, because unless you happen to be an industry executive or petroleum geologist, the chances are very good that you, like me, find oil to be. . .well, pedestrian.

Or, if you will pardon the pun, boring.

Whenever a fixation becomes mundane, it has a tendency to subdue the other faculties of mind – imagination, ingenuity, creativity – that can, quite often, improve social, political and economic conditions.

This might help explain New Brunswick’s current circumstances. The rut the province is in – fiscally, commercially, even demographically – could well be related to, if not actually derive from, our single-minded focus on the promise of a pipeline from Alberta’s oil patch and the putative promise (and danger) of a fully functioning shale gas industry in the future.

I would never suggest that we should dismiss these projects for the sake of our becoming less tedious people. But it might profit us to pull our heads from the sand and take a look at what other jurisdictions around the world are doing with energy development. (A well-known writer – though, his name escapes me – on the industry from, of all places, Calgary made a similar observation on New Brunswick CBC Radio’s rolling-home show last week).

Science Daily reports, “It’s less costly to get electricity from wind turbines and solar panels than coal-fired power plants when climate change costs and other health impacts are factored in, according to a new study published in Springer’s Journal of Environmental Studies and Sciences.

“In fact – using the official U.S. government estimates of health and environmental costs from burning fossil fuels – the study shows it’s cheaper to replace a typical existing coal-fired power plant with a wind turbine than to keep the old plant running. And new electricity generation from wind could be more economically efficient than natural gas.”

Meanwhile, also according to Science Daily, “High school and college students got a recruiting call. . .to join the Solar Army and help solve one of the 21st century’s greatest scientific challenges: finding the dirt-cheap ingredients that would make sunlight a practical alternative to oil, coal and other traditional sources of energy.

‘Enough sunlight falls on Earth in one hour to provide all of the world’s energy – for 7 billion people – for an entire year,’ said Harry B. Gray, Ph.D., leader of the army. He is the Arnold O. Beckman Professor of Chemistry and Founding Director of the Beckman Institute at the California Institute of Technology. ‘If we can capture that energy and use it to split water, burning coal, gasoline and other fossil fuels will be history.’

Maybe. Maybe not. But even the thought is inspirational – which is more than I can say about oil.

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Sep 19 2013
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Demographics, Economy, Politics

Facing up to the pension challenge

In the unlikely event that New Brunswickers, en masse, get busy and jump start another baby boom to someday repopulate the ranks of the provincial civil service, we might just avoid the fiscal crisis that now looms over public pensions.

The sad truth is, though, the $1 billion in unfunded liability will not vanish so appealingly. No fancies of the imagination, no wishful thinking, no sleights of the accountant’s hand will make it go away. Someone’s going to have to pay for it. The debate that roils now is solely about who.

Will it be, to some extent, those who paid faithfully into the fund for decades –  presuming that they would receive, upon their retirement, a predictable amount on which to survive their sunset years? Or will it be, to a much larger extent, those who are still working – many in the public sector; many more in the private sector where taxes must, by necessity, cover the pension shortfall.

Such is New Brunswick’s “Sophie’s Choice”.

The David Alward government has never been clearer about its stand on any matter of public policy than it has on this one. It wants to move to a shared-risk approach, modeled after some European systems, in which pensioners assume some of the hazards of their variably performing investments directly. Gone, then, would be the traditional and fixed guarantees, including yearly CPI indexing.

In a letter to the New Brunswick Pension Coalition (obtained earlier this week by the Telegraph-Journal), provincial Finance Minister Blaine Higgs said the status quo is unacceptable. So are the quick fixes contemplated to postpone the inevitable. “It would be impossible for the province to consider ‘Band-Aid‘ solutions,” he wrote. “Nor could we accept changes to the proposed model which would be unfair to our current and future employees or to New Brunswick taxpayers.”

It is around this issue of fairness than members of the Coalition also rally. Is it fair, they ask, for the provincial government to unilaterally claw back pension guarantees? Is it fair to force a retiree, with few economic options available to him, to accept a level of risk shrouding his income he was never led to expect until now? When, in essence, is breaking a deal ever fair?

Who’s right? In a way, everyone is. Still, and lamentably, for the current cohort of pensioners, there is no moral equivalency between these opposed positions. The ground on which the government stands is higher if only because most people in the province do not enjoy the arrangements at issue. Absent any reform, they would, however, have to pay for them.

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The disputants may blame each other until all the clauses in the Public Service Superannuation Act sunset. But the real enemy is demographics. And the cold, if somewhat comforting, fact is New Brunswick is not alone.

Just about everywhere in Canada, public pensions are in trouble. They were crafted at a time in the nation’s history when the future looked much more munificent than it does today. The pay-it-forward model – in which the existing generation of public workers essentially contributes to the retirement well being of future ones as it relies on the beneficence of past ones – is, for all practical purposes, broken.

Today, the population is increasingly geriatric and that – according to public policy experts William Robson and Alexandre Laurin, writing in the Globe and Mail this week – means “there are fewer active employees to support the pensions of retired beneficiaries. People are living longer, which means pensions need to be paid out for longer periods.”

In fact, as they discuss pension reforms underway in Alberta, they single out New Brunswick’s proposed changes as “ambitious” and “far-reaching,” suggesting that the “new shared-risk model. . .protects future generations by permitting reductions of base benefits already accrued, in extreme situations.”

For most New Brunswickers, the choice, though unhappy, is clear. In the interests of fairness, and for the sake of what’s left of the system, pension reform is necessary.

In fact, wishful thinking to the contrary, it’s unavoidable.

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Sep 13 2013
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Economy, Environment

Such a fine line: economy versus environment

Four strong winds that blow from Alberta

Four strong winds that blow from Alberta

This music industry icon, this erstwhile miner for a heart of gold, steps off the bandwagon just long enough to cluck his tongue and sample the air in beautiful, downtown Fort McMurray.

It looks like a nuclear test site and smells like one, too, says Neil Young: “The Indians up there and the native peoples are dying. The fuel (is) all over – the fumes everywhere – you can smell it when you get to town. The closest place to Fort McMurray that is doing the tar sands work is 25 or 30 miles out of town and you can taste it when you get to Fort McMurray. People are sick. People are dying of cancer because of this. All the First Nations people up there are threatened by this.”

What’s more, he told an American crowd the other day, “Fort McMurray looks like Hiroshima. . .a wasteland. . .The oil that we’re using here. . .they call ethical oil because it’s not from Saudi Arabia or some country that may be at war with us.”

Actually, there’s no need for atomic-era hyperbole. Good, old Fort Mac (population: 61,000) looks like Fargo, North Dakota, which is, in and of itself, bad enough. But I take Mr. Young’s point: The tar sands are despicable. Boo.

Among the celebrated elite, it’s a familiar refrain, gaining ever greater traction as U.S. President Barack Obama leisurely considers his next move in the Keystone XL pipeline kerfuffle. Indeed, the list of prominent “deathline” haters grows longer with each day that passes on the protest lines: There’s the Dali Lama and his pal, Al Gore; there’s Bishop Desmond Tutu and Sundance Kid Robert Redford; there’s actors Mark Ruffalo, Julia Louis-Dreyfus, Kyra Sedgwick, and David Strathaim. All are wedded to the simple, if absolute, certainty that Alberta’s oil industry is killing the planet.

They are probably right. Still, no one in a position of authority ever looks at the long game of energy policy – not when the short game is so economically lucrative and politically profitable.

Consider the oft-repeated rejoinder of tar sands apologists to the environmental lobby’s claim that Alberta bitumen is dirtiest source of oil in the world: No, it’s not. Or, as Canada’s Natural Resources Minister Joe Oliver told The New York Times’s Joe Nocera recently, “That statement that the Keystone pipeline would mean ‘game over’ for the environment is absurd.”

Mr. Nocera – a confessed proponent of the project – grabbed the baton from Mr. Oliver and, in his column, sprinted to the finish line:

“Oil mined from the sands is simply not as environmentally disastrous as opponents like to claim. Extraction technology has improved to the point where there is almost no difference, in terms of greenhouse gas emissions, between sands oil and old-fashioned oil drilling. The government has insisted that the companies extracting the oil return the land to its original state when the mining is completed. Indeed, for all the hysteria over the environmental consequences of the oil sands, there is oil in California that is actually dirtier than the oil from the sands.”

All of which misses the bigger point – the one that celebrity eco-warriors, themselves, invariably fail to make: If you’re pointing a shotgun to your head, does it really matter what calibre of shell you’re using?

The world is hooked on oil. It’s going to stay that way until it runs out (not likely) or its economies collapse (increasingly likely). If Keystone fails to win presidential assent this time around – thanks, perhaps, to the pickets of the preeminent – it, or something like it, will roll out the next time around, or the time after that. There’s no point in pretending otherwise.

Just as there’s no point in pretending that anyone is giving serious consideration to the long-term economic benefits of the Energy East pipeline proposal for New Brunswick – though we might do ourselves a favour by curbing our crowing tongues for a change and spend a few minutes actually examining the post-construction-phase ramifications of, and the durable commercial opportunities generated by, the project.

After all, out here in New Brunswick, where we don’t lace our boots without a government shoestring, we’re not looking for a heart of gold.

Just the gold.

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Sep 09 2013
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Economy, Employment

A pot-kettle-black moment for a good read

Where the hypocrites float

Where the hypocrites float

It’s not that I disagree with Thomas Frank, the resident writer of Harper’s polemical column “Easy Chair” and one of America’s finest living essayists. It’s not that I take issue with his latest effort in this month’s issue of the magazine and what he says about the financial collapse of 2008 or the “waste product” that “had been deliberately moved through the bowels of a hundred shady mortgage outfits.”

In fact, I have no problem at all with his visceral renderings of the villains and thugs who further soiled the already reeking back alleys of Wall Street with the scat from their gorging on other people’s money bought with the proceeds from their particular form of legal larceny. I have no problem with this: “Bribery and deceit and crazy incentives had been the laxatives that pushed this product down the pipe; money and bonhomie and reassuring economic theory had been the sedatives that put the regulators to sleep.”

I was one of those people “who were left to cry over cratered investments.” I have friends and relatives in the United States who were left “to pay for the bailouts and endure the downturn.” No one needed to be Greek, in those days, to appreciate that this wretched thing of ours “may well be the central economic episode” of our lives.

Surely, it has scarred us, marked us, made us less generous, less trusting – especially of authority, which is ironic when you consider that it was an almost complete lack of oversight that facilitated the global disaster. Or, as Mr. Frank, puts it: “The industry would supervise itself, we were told – and we believed it. Instead, our economic order turned out to be wobbly, even rotten. The great banks looked insolvent. The great capitalists looked like criminals.”

As for the salvation of these cheats and their confederates, it was purchased at the expense of trillions of dollars in taxes – dollars that would never again be fully available to the purposes and projects for which they were intended. In the process, we learned that “there was a whole class of businesses that could not be allowed to fail, no matter what kinds of suicide missions they undertook. . .That this class’s chosen public persona was one of churlish, sniggering contempt for the non-crooks who were now required to rescue them only compounded the shock.”

And the shocks keep coming: The evisceration of what was once known as the middle class; the yawning and widening chasm between those who have and those who have not; the gnawing suspicion that meaningful economic progress is a thing of the past; the scattering of all but the richest members of the global entrepreneurs’ club; the mounting debt; the disappearing jobs; the pervasive, collective sense of impotence.

Writes Mr. Frank: “A society that believes good government to be an impossibility is unlikely to do what is necessary to keep industry honest. Instead, its regulators will come to see the regulated, rather than the public, as their main clients. . .The rest of us will resign ourselves to scandal after scandal, as a new generation of looters rises up to claim positions at the trough when the old looters retire.”

As this esteemed writer – with decidedly progressive leanings and an artful skill at the angry lament – notes, we have become hardened by our travails, cynical in the long shadow our rage once cast. We no longer demand to know how these things could happen to us. We expect them with the regularity of the changing seasons. It’s not our fault, exactly, though “we have chosen to live with that.” What else should we expect of ourselves? “Just grab your cash,” he writes, “and hang on.”

No, I don’t disagree with any of this. I take no issue with the premise or conclusions of this lengthy screed.

Still, I do wonder, as I cast my eyes down past the bottom of Mr. Frank’s worthy essay on the crimes of the rich, the essential unfairness now bred in the bone of a once-far-more-generous society, and read the following ad posted by his own employer, Harper’s, which is “accepting applications” from university grads for two art and editorial department internships:

“All interns are encouraged to generate ideas, read widely, and approach problems creatively. . .Both positions are unpaid.”

What say you now, Mr. Frank, on the subject of grabbing cash and hanging on?

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Sep 05 2013
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Economy, Education

Learning life’s lessons early and often

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Apart from global warming, few issues in Canada provide readier cannon fodder for partisan warfare than early childhood education. That’s because, when it comes to her kids, every mum is willing to fight to the death on the battlefields of ideology.

When should the state intervene with structured pedagogy? When a tyke is five years old, or four or three? When she’s a toddler? What’s wrong with private daycare? For that matter, what’s wrong keeping your youngster tethered to your apron strings for as long as possible?

Politicians on the right side of the continuum love to make hay with this. They frame the debate, literally, as a motherhood issue. And the strategy works to marvelous effect within a certain important segment of the voting public.

The reform-minded Tory team – before it became the federal government – launched a terrific salvo into the camp of the reigning Liberals in 2005 when, as the CBC reported at the time, “Stephen Harper unveiled a Conservative plan on Monday that would give parents of young children $100 a month for child care. The. . .leader made the announcement at a noisy day-care centre in Ottawa. ‘This is just like a caucus meeting,’ he said on a campaign stop for the Jan. 23 federal election.”

The item continued: “Addressing the challenges parents face in raising kids while trying to earn a living, Harper said, ‘The Conservative plan for families will help parents find that balance.’ The Conservatives’ two-part plan includes money to help create child-care spaces as well as the $100-a-month ‘choice in child-care allowance.’ With the new allowance, families would receive $1,200 a year for each child under the age of six. . . .In fact, the only people who should be making these choices are parents, not politicians, not the government.’”

In fact, all the evidence suggested, contrarily, that early childhood education –  universally accessible, structured, and integrated into the public school system – is a boon to kids, their parents and, in fact, society at large.

A new study – reportedly the largest of its kind in Canada – seems to bear this out. The report, released earlier this week, by Queen’s and McMaster Universities found that children who attend full-day kindergarten are “better prepared to enter Grade 1 and to be more successful in school” than those who don’t.

That’s according to a blurb on the Ontario government’s website, which also states: “Comparisons of children with two years of FDK instruction and children with no FDK instruction showed that FDK reduced risks in social competence development from 10.5 per cent to 5.2 per cent; reduced risks in language and cognitive development from 16.4 per cent to 4.3 per cent; reduced risks in communication skills and general knowledge development from 10.5 per cent to 5.6 per cent.”

How much better prepared would they be if they had access to a national early childhood education (pre-kindergarten) system shouldn’t be a matter of conjecture. A seminal report on the subject, The Early Years Study 3, published in 2011, is both categorical and convincing: “Researchers have found that parents whose children attend programs that are integrated into their school are much less anxious than their neighbours whose kids are in the regular jumbled system. Direct gains have also been documented for children. Evaluations of Sure Start in the UK, Communities for Children in Australia and Toronto First Duty found children in neighbourhoods with integrated children’s services showed better social development, more positive social behaviour and greater independence/self-regulation compared with children living in similar areas without an integrated program.”

Naturally, there is a cost. But there’s also a reward. And as The Early Years Study 3 points out, the return far outweighs the investment: “Economist Robert Fairholm. . . (shows) how investing in educational child care (is) a handsdown winner. Investing $1 million in child care would create at least 40 jobs, 43 per cent more jobs than the next highest industry and four times the number of jobs generated by $1 million in construction spending. Every dollar invested in child care increases the economy’s output (GDP) by $2.30.”

These considerations, alongside the evidence of improving outcomes for kids, makes you wonder not whether our society can afford early childhood education, but whether we can afford our society without it.

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Sep 03 2013
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Business, Economy, Politics

Taking our economic bull by the horns

 

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It is a fitting chapter in a saga that is becoming as familiar to New Brunswickers as olympian economic woes are to Greeks.

Promising technology upstart makes headlines with its innovation and ingenuity; sells itself to an international company for a pretty penny; vows, nevertheless, to remain a vigorous, job-generating player on the provincial landscape; has the rug pulled out from under its head-office-manacled feet; lays off a hefty chunk of its workforce; waits for something else to happen.

It’s the waiting for something else that is the recurring theme in New Brunswick’s beleaguered commercial sector. And Radian6 of Fredericton is just the most recent, unhappy example.

Last week, the tech firm’s parent company, Salesforce.com of San Francisco, announced it was trimming about 200 jobs worldwide, roughly 67 of them in this province. The move came after the global social media monitoring operation purchased ExactTarget, an email marketing outfit, for $2.5 billion. The move, it said, was necessary, though it didn’t bother to explain why or how.

In a statement, Salesforce declared, “Combining ExactTarget with our existing Marketing Cloud provides synergy, and we will be reducing our total headcount . . .to reflect this opportunity. . .We care deeply about our employees and we’re providing resources to position them for success in the next step of their careers – whether that’s a new position within Salesforce.com or a new opportunity elsewhere.”

That’s mighty decent of them, only it’s not entirely clear where the surplus “headcount” will actually land in a province where the track record of job losses is now more entrenched than in any other part of Canada.

The many layers of poignancy in all of this are hard to miss.

Salesforce.com’s 2011 purchase of Radian6 – whose homegrown technology enhanced the American firm’s competitive position in the marketplace – for $326 million was heralded by all, but a few who wondered about the efficacy of offshore ownership, as a coup, positive proof that New Brunswick companies can succeed internationally.

Only last year, the provincial government offered Salesforce.com a payroll rebate totaling $3.8 million to help Radian6 create 300 jobs in Saint John and Fredericton by 2018. According to news reports, it has already dispensed about $500,000 of the fund, though Premier David Alward is at pains to explain why this is nothing to fret about.

Talking to reporters last week, he said, “There are significant accountability mechanisms or processes in place between the department and the company and I have full confidence that those will be followed and that the company will live up to their responsibilities under the agreement.”

Translation: Even though Salesforce is cutting its staff in New Brunswick today, it is still obliged to boost the total number of jobs by 300 over the next five years.

Still, that’s a remarkably optimistic posture for any government to assume regarding any foreign-owned entity operating within its backyard. Global economic trade  winds (or headwinds, as the case may be) routinely shred “agreements” to play nice with the locals. Ribbon cuttings, alas, are far less frequent than the cutting of losses.

In fact, none of this was even remotely preventable. We should expect such blips in jobs – up or down – as log as business flows more-or-less freely across national borders. Where New Brunswick’s private and public sectors must train their attention is on the urgent need to inject greater diversity, better capacity, more durable self-sufficiency, into the provincial economy.

We must start generating new opportunities that will load our cities and smaller communities with options. For every Radian6 that rises to prominence, there should be sixty others percolating with promise. Our provincial innovation agenda should have less to do with payroll support for existing (and exiting) enterprises and more to do with animating early-stage growth among commercially viable startups – export assistance, plant development, skills development, technology adoption.

For all the talk of pipelines and shale gas – opportunities (or challenges) over which we have little control – we must stop waiting for things to happen to us.

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