## 2011-06-23

### Bipole III: Statistical Mutilation, Bad Math, and Outright Lies

So, in the never-ending bipole debate two numbers have recently been bandied about as the differences the cost of the east and west side route. The PC's are using \$11,748, the NDP are using \$13.68. Now when the \$13.68 was first proposed (after the \$11,748, had already been set forth) I figured someone more knowledgeable than me would come forward and destroy one (or both) of the numbers, because the completely absurd disparity between the numbers means someone (or multiple someones) is either lying or mutilating statistics to the point it might as well be a lie.

But other than some credulous partisanship, and a bunch of crap in the comments I can't say I've seen much talk on it. (The best discussion of the numbers I've seen are from the Purple Rod comments a few months back, before the \$13.68 estimate). I have certainly not seen anybody analyze how two such vastly different numbers could possibly be put forward. (It is possible I may have missed it).

Time went on, then this from yesterday, and still no real analysis beyond a classic Abbott and Castello routine (of which I approve).

So given that nobody else seems to think these numbers are absurd enough to analyze, here goes:

First, the PC's number.

The cost difference between west side line vs. east side line is an estimated \$3.62 billion. East Side: \$788 million (\$600 million for the line, plus \$188 million for licensing) West Side: \$4.1 billion plus \$300 million line losses (the value of the energy lost in transit via a longer route).

A decent start, but perhaps somewhat unfair. The east side cost has almost doubled since the original cost, so it's quite possible the original cost of the west side was also underestimated. On the other hand, I know of no more recent estimate so I can't argue it's wrong.

Also, the \$4.1 billion was an unofficial leaked figure and the NDP claimed that it was out-of-date and meaningless and the Hydro CEO says he never saw it. But then again the accepted NDP price estimate has increased from \$2.2-billion to \$3.2-billion, something they insisted on until very recently.

So take that as you will.

The only people who know the true projected costs work for Hydro and would likely be risking their job if they provided information not cleared by higher-ups.

By using a Manitoba population figure of 1,232,550, the per person differential cost is estimated at \$2,937. This population figure is not a current Statistics Canada number. It looks like an about June 1, 2010 number.

Using the most current population number of April 1, 2011 of 1,246,396 gives a per capita value of \$2,904.

The difference in population due to the date is a minor issue and not really worth mentioning (especially given that these are not census numbers and are likely closer to estimates than an actual head count).

The main problem is that the use of population is somewhat inaccurate. The Manitoba population will (hopefully) not be paying for this, ratepayers will. (Obviously there is a huge overlap, but the distinction between ratepayers and taxpayers is important). A better number would be 510,000, the number of Hydro ratepayers. This would increase this number particular significantly.

But then again, ratepayers includes businesses and industry who would use much more power than your average home owner. I found this on residential vs. commercial/industrial usage page 16 of this forecast from 2002, where it states that general usage (all commercial and industrial use) accounts for 65.9% of the total usage, according to page 10 33.7% is residential, while street light usage takes up the last tiny chunk. I can think of no reason why this would have changed significantly in the last decade. According to this survey from 2010, there were 439,096 residential customers (which would mean about 70,000 industrial customers).

But this distinction between residential and commercial might be meaningless. Any greater costs in rates accrued by a company would simply be passed on to consumers through higher prices and/or onto workers through lower wages, so the general Manitoba population would be paying for most of the "general use" rate increases anyways.

Continuing on:

So, if the differential cost is \$2,937, then the differential cost for four individuals is 4 x \$2,937 or \$11,748.

In this analysis the number of families of size four is not used at all. It’s a per individual approach.

This is shoddy use of statistics. If they wanted cost per family, they should have calculated by household (which is available from StatsCan) not by individuals/4, but this is fairly irrelevant because the use of taxpayers rather than ratepayers is invalid on the face of it.

Conclusion: The PC's showed poor use of statistics and a gross error in the use of taxpayers.

So onto the NDP's number. (I know technically it's Brennan's number, but I have little doubt he was pressured by NDP to play along with their questioning for political purposes. At least, I really hope the CEO of Hydro is not actually as incompetent as this discussion makes him out to be).

So when I multiply that number by the number of families that the chief statistician tell us exist in Manitoba, I get a total amount of \$3.8 billion. Now I’ve looked at the presentation you made. The total cost estimate of the bipole is \$3.2 billion. So this advertising seems to suggest a total that’s more than the cost,

See above for earlier talk on the disagreement over the cost. I'm not sure which I'd use (so I'm actually going to calculate with both later on) because both are playing partisan games with numbers, but to attack the PC's calculations based on a potentially valid number from a leaked document strikes me as fundamentally dishonest. So, write off the bat we see the NDP are using a fundamentally different start point from the PC's.

yeah, I took the difference in length between the two routes. I took the total transmission cost, calculated the cost per kilometre, which really works out to quite an expensive amount I think it was \$940,000 a kilometre, and applied that to the incremental length and got a number of \$428 million,

This is just plain sloppy calculation and borderline dishonest. This assumes that the cost per kilometer on both sides is the same. Whether it is, I have no idea, but there is not way I would base a cost estimate on that assumption. There are far to many variables, such as terrain, existing infrastructure, political impediments, land use compensation, etc. to make it even remotely reasonable to make this assumption.

Second, his number of \$940,000 is an outright lie (I really hope the CEO of Hydro is not this incompetent). The cost was stated as \$3.2-billion; according to Hydro documents, the preferred route is about 1,364 km long. Simple division makes the cost \$2,346,041/km. Almost exactly two-and-a-half times the amount he calculated.

The east side route is about 479 km shorter. The calculated extra cost on this is \$1.1 billion, again about 2.5 times greater than Brennan's number.

I did not include what Mr. McFadyen was talking about, increases losses that occur, I excluded that. But that, it wouldn’t double this number, that’s for sure, it would be even less than that.

Notice this. I have no idea if it's double or not, but Brennan has stated that he didn't include part of the PC's calculations. The numbers are automatically not comparable because of this. Any number Brennan gives after this will automatically be lower than the PC's number. Any claim the numbers are comparable is a straight-out lie.

So then I took the number of households, escalated up to 2017. And that number’s less than the current number of customers, and I took the incremental cost per household (inaudible…)

That number came out to \$821 per household.

At least he's using households not individuals, but he should be using ratepayers, not households. Similar problem as with the PC's number. The last census counted 448,780 households in Manitoba in 2006. So, \$953/household if we use Brennan's earlier number. \$821 sounds reasonable given that the number of households has increased since 2006. But his math was wrong earlier, so the number is actually almost \$2,500 per household, but we can say \$2,000 as the number of households has increased since 2006.

And then I said, well, that’s over the life of the line so I divided that by 60. And so the annual cost would be \$13.68.

After all the bad math and poor statistics, this one is the most disgustingly dishonest. You can not compare a total number like the PC's with an average yearly cost over 60 years like this one. The dishonesty of it just reeks.

Not to mention that if we amortize the cost over 60 years like this calculation suggests, the interest rates will well over double the cost of the project. You can play with this amortization here, but even if we put everything in Hydro's favour: 1 payment a year, a low 3% interest rate, the total interest paid will still be 140% of the cost. So, interest costs would be more than the project itself. (I really, really hope the CEO of Hydro is not incompetent enough to amortize over 60 years).

If we aren't amortizing over 60 years, then the rate increases will not be paid over 60 years, they will be paid over the period of amortization. So the use of 60 years is fundamentally dishonest.

Conclusion: The NDP/Brennan abused statistics and math to the point where I consider it an outright lie and they even got basic division wrong. The PC's calculations were sloppy and based on poor assumptions, but the NDP/Brennan calculations were just disgustingly dishonest.

Now onto a more accurate number than either of those sad, partisan little bits of statistical mutilation.

I'll calculate a few numbers using both a low using the NDP's \$3.2-billion and a high using the leaked report's \$4.1-billion.

The average cost per ratepayer (510,000) for constructing the entire west side line could range from \$6275 to \$8039.

The average cost per ratepayer (510,000) of the east side line using the \$788-million estimate is \$1545.

So, if we use the original estimate for the east-side line the additional average construction cost per ratepayer of constructing the west line over the east line could range from \$4370 to \$6494.

An honest assessment on the available public information would put the extra cost of construction (not including transmission losses) of the west side line at somewhere from \$4370 to \$6494 per ratepayer. These are the numbers I would use depending on which west side project cost estimate I accepted as true.

I'll perform some other calculations and why I wouldn't use them.

Extra total cost of west side project based on the average cost per a kilometer of transmission line (calculated earlier): \$1.1 billion.

Average cost per ratepayer (510,000) based on this: \$2157.

This number is not exactly dishonest, but, as mentioned earlier, it assumes that the cost per kilometer is the same in both projects, which is not an assumption I would make unless there was some hard proof. It's use is fundamentally unsound unless said hard proof is offered.

Now let's calculate the cost per residential ratepayer, this will be a bit more complex, so I'll put the math in.

\$3,200,000,000-788,000,000 = \$2,412,000,000
(Extra total cost of west side line).

\$2,412,000,000 * 33.7% = \$812,844,000
(Cost of west side line borne by residential ratepayers).

\$812,844,000 / 439,096 = \$1851
(Lower limit extra cost of west side line per residential ratepayer).

\$4,100,000,000 - 788,000,000 = \$3,312,000,000
\$3,312,000,000 * 33.7% = \$1,116,144,000
\$1,116,144,000 / 439,096 = \$2542

So, the total extra construction cost (not including transmission losses) of the west side line per residential ratepayer would be somewhere between \$1851 and \$2542.

This would be a perfectly legitimate number to use. I would not use it myself, because the extra costs borne for commercial and industrial use will simply be passed on to either Manitoba consumers or workers as mentioned earlier. But let's calculate commercial and industrial ratepayers increased costs.

\$2,412,000,000 * 65.9% = \$1,589,508,000
\$1,589,508,000 / 70,000 = \$22,707

\$3,312,000,000 * 65.9% = \$2,182,608,000
\$2,182,608,000 / 70,000 = \$31,180

So, the total extra construction cost (not including transmission losses) of the west side line per a commercial/industrial ratepayer would be somewhere between \$22,000 and \$31,000.

Transmission losses have been estimated at about \$300-million by a group of engineers. So that's about an extra \$588 per ratepayer of losses.

The costs of this will borne by the Manitoba consumer, so prices of goods and services will go up (or it will be borne by the workers, in which case wages or benefits will go down).

So there you have it, the actual extra costs of the west side route as opposed to the east side route calculated as accurately as possible with the information publicly available.

As for what side of the debate I support, I support the East Side route because the experts that are not being leaned on by the government to express a certain view support it, and being no engineer and seeing no real flaw in their arguments I accept their expertise.

BTW, their estimate was \$4,200 for a family of 5, or about \$840/person. Although, it is not clear if that includes transmission losses or not. They are also using old estimates from almost a year ago, and the cost of the west side has increased.

## 2011-06-22

### Bill C-51: Digital Fearmongering

It seems that some of the digital world is getting in a tizzy concerning the new Bill C-51 which will be included in the omnibus crime bill, in particular "online spying". The Globe and Mail has a somewhat recent article.

Anyhow, here's the legislative summary of Bill C-51. As far as I can tell the actual text has not been released and won't be until Parliament is back in session and the omnibus crime bill is introduced.

At first reading what has been written about it, I was worried. Reading the summary, the fear of internet spying though seems exaggerated. The first part seems somewhat ominous:

According to the Department of Justice, the new investigative powers within the proposed legislation give law enforcement agencies the ability to address organized crime and terrorism activities online by:

enabling police to identify all the network nodes and jurisdictions involved in the transmission of data and trace the communications back to a suspect. Judicial authorizations would be required to obtain transmission data, which provides information on the routing but does not include the content of a private communication;

requiring a telecommunications service provider to temporarily keep data so that it is not lost or deleted in the time it takes law enforcement agencies to return with a search warrant or production order to obtain it;
Requiring the keeping of data by ISPs seems somewhat uncalled for. My guess is that many people just read this section and panicked. But, if one looks on the section talking about the tools of "internet spying" it's actually a very reasonable bill:
2.1.2.1 Preservation Demand and Order (Clause 13)

Information in electronic form may be easily and quickly destroyed or altered. Clause 13 of the bill therefore adds a new investigative tool to the Code to preserve this type of evidence, which may take one of two forms: a preservation demand or a preservation order. A preservation demand is made by a peace officer (new s. 487.012 of the Code), while a preservation order is made by a judge, on application by a peace officer (new s. 487.013 of the Code).

A preservation demand or order directs a person, such as a telecommunications service provider (TSP), to preserve “computer data”13 that is “in their possession or control”14 when they receive the demand or order. However, a TSP may still voluntarily preserve data and provide it to a law enforcement agency, even where there is no demand or order (new s. 487.0195 of the Code).

This new investigative tool is different from the data retention measure in effect in some countries,15 which compels TSPs to collect and retain data for a prescribed period for all their subscribers, whether or not they are the subjects of an investi­gation. On the other hand, a preservation demand or order relates only to a particular telecommunication or person, in the context of a police investigation. A preservation demand or order may be given to a TSP only where there are “reasonable grounds to suspect”16 that an offence has been or will be committed17 (new subsections 487.012(2) and 487.013(2) of the Code). However, the person who is suspected of the offence may not be compelled to retain data under a preservation demand or order (new subsections 487.012(3) and 487.013(5) of the Code).18

Preservation demands and orders are temporary measures: they are generally in effect long enough to allow the law enforcement agency to obtain a search warrant or production order. The maximum length of a preservation demand is 21 days, and the demand may be made only once (new subsections 487.012(4) and (6) of the Code); the maximum length of a preservation order is 90 days (new subsection 487.013(6) of the Code).

A person to whom a preservation demand or order is made is required, after the demand or order expires, or after the data have been given to the law enforcement agency under a production order or search warrant, to destroy the computer data that would not be retained in the ordinary course of business (new ss. 487.0194 and 487.0199 of the Code).

Contravention of a preservation demand or order is an offence punishable, respectively, by a fine of not more than \$5,000 (new s. 487.0197 of the Code) or a fine of not more than \$250,000 and imprisonment for a term of not more than six months or both (new s. 487.0198 of the Code).

In other words, a police officer(or a judge)can temporarily require an ISP to hold a specific piece of data under their control for 21 days (90 in the case of a judge) so that they can get a warrant if there is reasonable grounds to suspect a crime has or will occur.

There's even a little section on how it's different from other countries who require the retaining of data for all internet users.

The next section on production orders also seems sensible:

2.1.2.2 Production Orders (Clause 13)

A production order is made by a judge and is similar to a search warrant, the difference being that the person in possession of the information must produce it on request, rather than the law enforcement agency’s going to the site to obtain the information by searching and seizing it. A law enforcement agency with a production order will be able to more readily obtain documents that are in another country, for example.

The Code already provides a procedure for obtaining a general production order, that is, an order that applies regardless of the type of information a law enforcement agency is seeking.19 Issuance of the order is based on the existence of reasonable grounds to believe that an offence has been committed. The Code also provides for specific production orders, that is, orders for obtaining certain precise information, such as banking information or telephone call logs.20 Issuance of specific production orders is based on the reasonable grounds to suspect that an offence has been or will be committed.

Clause 13 of the bill creates new specific production orders, issuance of which is based on the existence of reasonable grounds to suspect that an offence has been or will be committed, which allow a peace officer to obtain two types of information from a TSP:21 “transmission data” (new s. 487.016 of the Code) and “tracking data” (new s. 487.017 of the Code).22

Essentially, “transmission data” are data that indicate the origin, destination, date, time, duration, type and volume of a telecommunication (e.g., a telephone call or Internet communication), but does not include the content of the telecommuni­cation.23 This type of data is useful: for example, it may be used to identify all TSPs involved in the transmission of data and identify the initial TSP and thus determine the origin of a telecommunication (new s. 487.015 of the Code). “Tracking data” relate to the location of a thing or individual.

These new production orders allow law enforcement agencies to obtain historical transmission or tracking data, that is, data already in the possession of the TSP when it receives the order. To obtain these types of data in real time, law enforcement agencies need a warrant.

A review procedure is provided for challenging any type of production order, existing or new (new s. 487.0193 of the Code).24 A person who has received an order may apply to a judge to revoke or vary it if production is unreasonable25 or discloses privileged information.26 As for a preservation order, violation of a production order is punishable by a fine of not more than \$250,000 and imprisonment for a term of not more than six months, or both (new s. 487.0198 of the Code).

Basically, with reasonable grounds, a judge may require an ISP to provide information to police officers.

This seems like a perfectly sensible piece of legislation; a good compromise to give police powers while not hurting privacy. Objections of "internet spying" seem to be nothing more than hyperbolic fear-mongering.

On the other hand, the bill is not without worries, particularly the hate propaganda section:
2.1.1.1 Hate Propaganda (Clauses 4 and 5)

Hate propaganda offences must be committed against an “identifiable group.” Clause 4 of the bill adds “national origin” to the definition of “identifiable group.”8

Clause 5 of the bill provides that the offences of public incitement of hatred and wilful promotion of hatred may be committed by any means of communication and include making hate material available, by creating a hyperlink that directs web surfers to a website where hate material is posted, for example.

I generally dislike hate propaganda offences; free speech should be free no matter how repugnant it may. Hate propaganda may not be nice, but any curtailments of free speech are worse. On the other hand, expanding it to national origin is not really that big a change and nothing to get newly excited over.

Besides the expansion of hate propaganda, clause 5 could be worrying, depending on the exact wording, as it could make hyperlinking to a site an offence. The way it is written it seems far too over-reaching, but given the poor-writing in the summary, the actual text may not be as bad as the impression gives.

## 2011-06-15

### Public Waste: Perspective in Discussing Government Spending

This week, for those not closely tied to the public sector, is National Public Service Week (NPSW). A time where the Canadian public service engages in self-congratulations.

(That's not a knock on the public service, these special days, weeks, and/or months of self-congratulation are common; everyone from engineers to secretaries to clowns have them nowadays. The idea of special weeks of self-congratulations has always seemed silly to me, but that's not reason for this post, so I'll move on).

This morning the Sun had the op-ed "Flagrant misuse of tax dollars" on the front page, which complained about the use of tax dollars for a public service event. For some reason, probably due to its visibility and a lack of knowledge of other events, they focused on this one particular inter-government event, but most government departments and units usually have events in this week, with these events ranging anywhere from free cake to discussions/speeches on the public service to an afternoon of team-building games to the discussed party. There's even a ceremony for the awarding of the Public Service Award of Excellence in the National Capital Region.

The Sun's piece was somewhat pathetic. Generally, I am in agreement with the Sun's editorial stance against government over-spending & over-taxation and in favour of sound fiscal management, but this article was petty and borderline vindictive.

(Advice to the Sun, articles like this only serve to undermine the cause of limited government and fiscal responsibility. It may rile up parts of your base of right-wing populists, but it drives away moderates, fiscal conservatives who'd agree with you but would be more apt to read the National Post, and even parts of your own base with a little more perspective on things).

In a coincidence, the WFP had an op-ed on the Harper Hockey "scandal". The WFP article (originally from the Calgary Herald) was a well-done piece, I would suggest a read.

Also floating around in the news in the last little while are the Canada Post strike, the Conservative spending review and promise to reduce the budget by \$4-billion by next year, The Auditor's report on G8 spending, and discussions on Senate reform.

This prompted me to write this post on the necessity of perspective when discussing government finances. Both the ruckus over Harper flying to the Canucks game and the Sun's reaction to NPSW event are seriously lacking in this.

The cost of the Canuck's flight is estimated to cost up to \$10,000/hour and a direct flight is under an hour each way. Harper followed the rules, paid for his own ticket, and paid the amount of commercial-equivalent airfare, so there's no ethics questions involved in this debate. In total, this cost at most \$20,000 for Harper to show support for "Canada's team" in the finals for "Canada's game". You may or may not agree whether Harper should have flown to support the team, the fact is that the cost would not matter either way in this discussion. \$20,000 may seem like a large amount to individuals, but in terms of government spending it is not even a rounding error. The National Post puts it into perspective for us here. Canada paid almost \$50-million in MP pensions for this year alone. Making a ruckus over a one-time use of less than \$20,000 is pointless, petty, and idiotic.

I can find no data on the cost of the NPSW or any on average civil servant wages in Canada, so I'll guesstimate.

PM, EC, AS, and CR are the most common wage categories in the federal civil service, CR's are paid significantly less than the other categories, who are paid roughly the same. Rates of pay for government workers can be found here. We'll use a salary of \$50,000 (roughly equivalent to a PM-02 and and easy number to work with), so the wage would be roughly \$25/hour.

The event had 300 employees, and we'll estimate it took 2 hours. So, in total we can estimate cost in salary as near \$15,000. \$15,000 is not that big a deal when it comes to government spending. If we calculate a two hour event at that wage over the 263,000 civil servants in the federal service the cost would be a bit over \$1.3-million, which would seem like a lot, but again in government finances, a million or two is hardly a rounding error. (For another example, the 2011 budget came in at an unexpected \$4-billion less than was forecasted).

On top of this, team-building exercises and celebrations are common practice in private organizations, so it's not like it can even be pretended that this is some special perk for civil servants.

To put it simply, complaints, such as the Suns, about the NSPW are as petty and idiotic as complaints about Harper's trip to the Canuck's game.

The Senate debate and the Monarchy debate also sometimes display this kind of fiscal lack of perspective. In complaining about the Senate, the anti-Senate NDP notes that the Senate costs \$90-million a year. A seemingly large amount, but in reality a paltry \$3/Canadian. The governor general costs about \$35-million a year, about \$1/Canadian. In terms of government finances both of these number are next is nothing. This doesn't mean objections to the Senate or the Monarchy are not to be taken seriously, but the minimal cost should be irrelevant to whether you believe they should exist or not.

The cost of an election is another issue lacking perspective. Elections Canada pegged the cost of an election at about \$300-million causing the Toronto Sun to whine. This is about \$10/Canadian. Surely any reasonable person would say that \$10 is worth a free electoral democracy.

At this point, though, I may be giving off an appearance of a free-spending socialist, but I am not. I am very much fiscally conservative. The thing is though, government expenses have to be evaluated realistically and in perspective, the costs of the previous issues are all examples where the impact of the costs was blown out of proportion.

Also blown out of proportion are funding cuts. The Conservatives announced that they would cut the federal budget by \$4-billion/year by 2014-15. The usual suspects of socialists and unions cried foul and scare-mongered about massive job losses and cuts to public services. The reality is \$4-billion is 1.7% of the 240.8 billion budgeted for last year.

1.7%

Let that sink in a bit. The biggest budget cuts since the 90's that is to bring ruin to the public service is a piddly 1.7%. This is only half of the projected \$8-billion increase in federal expenditures between from last year to this year. It is also only 11% of the projected deficit for this year. \$36.2-billion deficit for this year. The impact of these cuts is also grossly over-exaggerated. The cuts are substantial, but they are not earth-shattering.

Maclean's illustrates the exaggeration surrounding the impact of these cuts.

So then, how do we keep things in perspective?

First of all, little things do add up. "A billion here, a billion there, pretty soon it adds up to real money." Enough small cuts can add up to major savings. The reverse is also true, enough new small expenditures can quickly snowball to take large chunks of the budget. As the Maclean's article stated:

The federal government will spend nearly \$40 billion this year in “other transfers,” that is, neither to provinces nor to people, but to organizations: big businesses, small businesses, native bands, social clubs, in fact just about anything with a business card and a mailing address. Just to list the “grants and contributions” over \$100,000 takes up 280 pages in the Public Accounts, in six-point Helvetica.

Enough relatively tiny expenses can rapidly add up, so just because something might be little more than a government rounding error, does not mean it should not be evaluated, but neither should all sense of perspective be lost.

Second, don't get caught up in partisan or ideological rhetoric lacking fiscal perspective, whether from the left or right.

Third, remember that there are reasons for cutting programs other than monetary. This was mentioned earlier in relation to the Senate and Monarchy. As another example, the Gun Registry has to go. \$2-billion over 15 years is pocket change, but the program is more objectionable for its purpose of controlling gun owners than for its costs (although being 2000% over-budget is a sign of gross incompetence).

Fourth, keep in mind that just because costs might be relatively small and we should avoid a lack of perspective, they can still be helpful. For example,
the CBC can be privatized for \$1-billion savings each year, as TV and radio services are readily available from the private sector and as such, there would be no real loss to the Canadian public at large, despite the protestations of some special interests to the contrary. We should avoid pretending that the \$1-billion would be some budgetary windfall, it would not be, but enough \$1-billion cuts here and there and it would add up.

Fifth, keep in mind the big ticket items:

Civil servant salaries & pensions - Salaries, benefits, and pensions make up the bulk of operating expenses. A small percentage increase in civil servant salaries can lead to billions in new spending. Reigning in public sector unions and continual large increases in civil servant wages is important in controlling government costs. Civil servant pensions are fairly well run in Canada and should not present to much of a problem. In the US they are a lot more of a problem, because the US has had a habit of raiding pension funds to spend, leaving their plans with gaping fiscal holes. Canada only had one major pension raid in the Chretein era during a time of surplus, and is well run enough that it should not present to much problems, but with defined-benefit plans, continually lengthening life expectancies, and the boomers retiring there could always be problems if markets do not do well.

Health spending - This is the big one; the expense that really needs to be watched. The Conservatives committed themselves to a yearly 6% increase in health transfers. This is not mathematically sustainable unless GDP also increases at an unrealistic 6% a year (it usually only increases only about 3 or 4%). This does not even include the inevitable increases in provincial spending. With the boomers growing old, public health spending will likely become unsustainable in the context of the current system. It will have to be reformed, likely with some amount of privatization and market reforms or the system will break (barring massive, unexpected productivity gains from technology).

Pensions - Again, the CPP have been fairly well run, has a diverse investment portfolio, is a hybrid between pay-as-you-go and fully funded, and as far as I know the CPP has never been raided. This should be fine, but it is a big ticket item and a prolonged recession combined with extended life expectancies and the boomers retirement could cause serious fiscal problems. It is something to be watched, but should be stable.

Debt servicing - This has decreased tremendously since the 1990's, but last year we paid \$30.9-billion out of a total spending of \$271.7-billion, about 11% of the federal budget on nothing more than interest payments. And this is with exceedingly low interest rates. A rate hike could increase this substantially.

Notice how all the most important items are those that will have the most public resistance to cuts. This is why deficits occur and taxes increase. Few are willing to pay the political costs necessary to reign in the important items. Chretein kind of did, but did so through raiding pension funds (creating its own problems) and devolving to the provinces (simply shifting the tax burden) in addition to public service cuts.

Essentially, what I am saying is that when discussing public spending avoid losing perspective. Some expenses, such as a hockey game, are just so small they are not worth making a big deal over. Some expenses, such as elections, are large, but the value is well worth the expenses. Small changes add up, but hysteria towards either small cuts or increases does no one any good.

To finish off, I can't have a post called Public Waste without mentioning the Kipling poem of the same name, it's only tangentially related to today's topic, but an excellent poem nonetheless. I would suggest you check the link and give it a read.

## 2011-06-07

### Elitism, Art, and Right-wing Populism

It's been a while since I posted on here. I said what I wanted to say about the election in my last post and I've been busy. Since the election the only thing I felt somewhat compelled to post on was the 60% statistic going around, but that would have been little more than a rant on idiocy. Graham posted on it and his was a lot more fair and a lot less harsh than mine would have been. I've now probably lost whatever little momentum I had for this blog when I started, but oh well.

So anyway, I hope to post more through the Manitoba election season (we'll see), but for today, I'm going to talk about right-wing populism. I was reading Margie Gillis, The Media, and Them High-Falutin' Ideas on Nothing in Winnipeg and thought I'd respond. I'll start with the caveat that I did not watched the news segment discussed for more than a couple minutes and got bored, but the segment itself is not that important to the discussion.

Before I begin, Sun News is the voice of right-wing populism in Canada, just as Fox is the voice of right-wing populism in the US. The Sun News channel was specifically created to fill this market. There is no major left-wing populist media outlet in North America as traditional left-wing populism has been almost wholly abandoned outside the intelligentsia and public service unions (whose membership base is often not in full agreement with the more activist agendas of the unions). More on this in a bit.

That anything that doesn’t enjoy the support of the majority must be “elite,” and thus suspect. (False.)
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* To be fair, there are people in the arts who could certainly be considered elite — I would point to the many extremely wealthy private citizens who are often prominent or silent donors, board members, and fundraisers for everything from the ballet to the most esoteric art galleries. It’s telling that these folks (and I applaud their efforts) are usually not the people referred to when certain crowds discuss the “elite” who support and work within the arts.

This is one misinterpretation a lot of individuals with more left-leaning or centrist beliefs make a fair amount. They miss the presuppositions behind right-wing populism, often imputing left-wing populist assumptions onto them.

Traditionally, the category of the "elite" are viewed based on a left-wing, quasi-Marxist conception of economics. There are the rich elite and then there are the poor working masses who the elites extract "surplus value" from. This class warfare conception forms the basis of left-wing populism and it has been largely abandoned in North America. While there's the occasional "soak the rich" rhetoric, most left-wingers have abandoned the class warfare approach, recognizing that if you "soak the rich" over-much they'll just shut the factory down and move it to China. Most progressives realize that you can not destroy the rich as you need to keep them around to support the welfare state, which the rich pay the lion's share of.

What class warfare politics that does exist generally resides in academia, which is relatively isolated from economic realities due to their centrality in the modern credentialism system, public service unionism, which are also fairly isolated from economic realities exceptingin the occasional public service slash, and in racial minorities, who are still relatively economically disadvantaged but their populism is generally more racial in tone than strictly economic.

Most of the white working class, the traditional base of left-wing populism in North America, has abandoned it because as long as there's a basic social safety net and jobs (which they know will leave elsewhere if the country is to punitive the rich), they live fairly comfortably.

Despite the abandonment of left-wing populism, the political language and pre-suppositions that formed the basis of it are still in use. The conception of the elite as being economic elites is one such remnant.

Populism in North America has largely become the domain of the right, but it is a different animal. This populism traces it's routes back to the "silent majority" reaction to the 60's counter-culture. It is not based on economics (although, the Tea Party movement may change this, but it's too early to tell). Rather, it is based on culture. The counter-culture tried (and succeeded to a certain degree) to radically alter North American culture form its traditional value and right-wing populism became the go to of the "silent majority" in reaction to this attack on traditional values. At this point, the basis of political disagreement began to move away from economics to post-materialist values. Thus the "culture war," the original basis of right-wing populism.

Knowing this, we see that when right-wing populists talk of elitists and elitism, they are not talking about the traditional economic elites, rather they are talking about cultural elites. The economic philosophy of right-wing populism is generally somewhat producerist in tone, setting "producers" (ie. workers, businessmen, entrepreneurs, etc.) against "parasites" (ie. "welfare bums", "corporate welfare", public bureaucrats, etc.). Most economic elites, excepting those seeming to survive primarily off corporate welfare and rent-seeking, would be among the producers and would be seen as models rather than enemies.

To the right-wing populist, the elitists consists of those who are seen as those who are becoming wealthy by being parasitic (ie. the bureaucratic and political elites) or the gate-keepers of culture who are seen as hostile to traditional values. (It should also be noted that right-wing populists often use "elitists" and "elitism" rather than "elites" as "elites" has a more economic connotation, while elitists is more to the point).

Now, we'll isolate art in particular. First, we must make a rough distinction between "high art" and "popular art". Right-wing populists generally don't have a problem with popular art in general (except where the values being espoused by a particular piece of art are antithetical to right-wing populist values). Except for some extreme religious fundamentalists (which are a small and waning sub-section of right-wing populism and have never really had any strength in Canada) there would be little political objection (taste is another discussion entirely) to Hollywood movies, popular music, trade books, classic paintings etc. that were not directly espousing hostile values.

The problem is more with "high art" such as modern theatre, interpretive dance, and modern paintings. I know these categories are rough and over-lapping, but this distinction is essential.

The first problem is that "high art" is generally "parasitical" these days; it is funded in large part by government through taxation. I'm not going to start the art funding debate, but this "parasitism" is one of the primary reasons for populists dislike of high art.

Second, is that much "modern" art is generally inimical to right-wing populist values. (At this point, we should also distinguish between "modern" and "classic" art. The "classics" like classical music, Shakespeare, paintings that aren't "modern", etc. are less prone to dislike. As defining features of Western civilization there is some love for classic art among right-wing populists. There is less hostility towards this and more mixed feelings about public funding). Modern high art generally embraces leftist values and generally are hostile to traditional values.

The third is perceived condescension. Nobody likes feeling that they are being condescended to, right-wing populists are no different in this regard. The arts debate feels condescending to populists and, to some degree, the general public at large. If say, a metalhead and country-western lover disagree, they might argue that the other's taste is horrible, but, generally, no one suggests that liking one genre or the other makes you an inherently better person, but high art is different. Those who support high art often give off a strong tone of superiority in taste and that those who don't like high art are lacking as a person. This is often the basis of why high art is argued as deserving of government funds where popular music might not be. (Whether supporters of high art mean to be condescending is irrelevant, that is the way they come off to many who do not particularly enjoy high art).

Knowing this we can begin to more accurately understand right-wing populism's (and thus Sun News' and Krista Erickson's) reactions to "art".

No, it’s everywhere, really: the bold and brawny pride of Not Getting certain art forms, or philosophical concepts, is a common feature of American media in particular — and it’s cropped up with some frequency in many Canadian outlets over the years.

"Not Getting" high art would be a source of pride for exactly the reasons illustrated above. It's a form of social signalling that you are not an elitist, that you are not a parasite, and that you are agreeable to right-wing populist values. Sun News and Krista are doing just this sort of signalling to their intended audience.

For similar social signalling reasons, cultural elites would generally turn up their nose at and deride, for examples sake, Tom Clancy novels, which are right-wing military fiction written for the "common man".

And is touting that ignorance as some sort of credential really what we want to be striving for?

Given the basis of right-wing populism, it is excellent credential to strive for if that is who you are appealing to (which Sun News is).

Also, once you understand the basis of right-wing populism that hostility towards the arts becomes perfectly understandable. It would be akin to the left-wing elite deriding Ayn Rand or "Not Getting" the appeal of Tom Clancy. It signals that you are one of the group and that you reject culture that is inimical to the group and its values/culture. There is no good reason to bother to try to "Get It" and some very good reasons to deride it.