Double Blind

BC Ferries was brought into existence in 1959 by the provincial government to ensure reliable service between Vancouver and Victoria. Five years later, they built such vessels as the Queen of Saanich, Queen of New Westminster, Queen of Vancouver and 7 other ships which are currently in operation. There were a couple more ships built in the early 1980’s and two more ships in the early 1990’s, but otherwise most of BC Ferries’ fleet is old and is running into age-related problems. Most of the traffic volume on BC Ferries is between Vancouver to Victoria and Nanaimo and there is a need for ferries that can load/unload fast, travel fast, be inexpensive to build and operate and perform all of this safely.

Fast forward into the mid 1990’s and the Fast Ferries were built to requirements that were not to BC Ferries’ needs. Specifically, the fast ferries were overwhelmingly expensive and did not deliver the speed gains originally anticipated. A description of the actual ships can be found here, and the auditor general’s report on what went wrong is here. The project was somewhat politically motivated – the then ruling NDP government wanted to start a shipbuilding industry in the province and use the fast ferries as an example to showcase BC’s ship-building abilities to the rest of the world.

BC Ferries then spent $460M on a project that was projected to cost $210M (the taxpayers eventually chewed up the bill), but more importantly, these ferries were supposed to have replaced the ferries that were built in the early 1960’s. This didn’t happen, and this did not alleviate BC Ferries of the fact that they still have to purchase new ships to replace the 40-year old vessels. Imagine if you were driving an automobile that was 40 years old – the naval analogy is equally true. BC Ferries still needs to build new ships for the Vancouver to Nanaimo route.

There has been a lot of commotion lately in the press that BC Ferries has not included local BC shipyards in a pending bid to purchase two or three new ferries. The corporation was expected to contract out that work to some shipyards in Europe and the unions are screaming about how money is leaving the province and how BC will lose 2000 jobs and other such screaming we’ve heard in the past (e.g. healthcare will grind to a halt when the nurses went on strike, the roads grinding to a halt when Translink bus drivers went on strike, etc.).

As much as I would like to see those jobs and industry stay inside the province, if BC Ferries can get a better deal out of the country, they should choose to do so. If the ferries are built inside the province for a more expensive price, effectively the public is subsidizing the shipbuilding industry. Do we really want to do that? The last subsidy that we gave them with the Fast Ferries failed to sustain their industry. Apparently the capacity of the shipyards in BC are at 20% of what they used to be. Could this perhaps be because our shipyards are not as competitive as our international competition?

I’m also of the opinion that people are speaking about this issue without enough information to correctly make factual statements. We do not know the parameters of what the bid is about, and I’m not in a very good position to assess the potential of the BC shipbuilding industry. Until more information is dug up on exactly what the requirements are for BC Ferries, it’s difficult to say whether the province has any moral interest in ensuring the ships get built here.

I do highly suspect, however, that our provincial government knows that they’re not going to get any votes from people that are directly affected by this issue, so they don’t have much to lose if union jobs are not created in this province. I seriously doubt that the unions will be voting for anybody but the NDP in any provincial election, no matter how well things go for them.

Wretchard at the Belmont Club describes on the bottom of his article that Canada is getting its nose pushed in by Iran. The cause of all of this is when a Canadian was traveling into Iran and got murdered by some government operatives because she was working on some media project that was critical of the existing government. The Iranian government let the murders go, and as a response, Canada got all angry and is deciding to go to the impotent UN and International Criminal Court.

Pierre Pettigrew (currently the minister of external affairs) is smart enough to know that that UN and the ICC will do nothing to resolve this case. His best political decision will be to try to bury this matter by just paying it lip service and letting it pass, which is what he is currently doing. The Canadian public is the most apathetic of the first world nations; this is demonstrated by our withdrawal from the world political scene after World War 2. Ever since that war ended, the only places around the world that Canadians have landed have resulted in ineffective campaigns. Canada really hasn’t done anything in the world scene in half a century. We’ve landed some troops in the Korea war, we let our troops get butchered in Somalia, and we’ve got some in Afghanistan right now, but this is absolutely nothing compared to what we did in World War 2.

The Iranian government is also smart enough to know that the Canadian government and the ICC can’t do anything to them, so they will let their assassins free. This is something that Canadians must accept if they won’t permit a military that can project power abroad.

Psychologically, the end of Canadian influence in the world was in 1959 when the government canceled the Avro Arrow interceptor. Although this single event cannot be attributed to the downfall of our military power, it was the culmination of a decade of anti-war sentiment after World War 2. After that, our military defence was outsourced to America. Lately, as we’ve pissed off America, it seems that we’ve outsourced our defence to the United Nations and the ICC.

Unfortunately, our previous prime minister, Chretien, made the correct political but incorrect strategic decision by not supporting the US invasion of Iraq back in 2003. This is going to cost Canada political favours when the going gets rough for us in the realm of geopolitical affairs. Although there are wide oceans separating our country from the rest of the world (except the USA of course), this will become less of a factor as other countries begin to play catch-up militarily.

Over the past 50 years, Canadians have gotten very complacent and have gotten pacifistic; public support for the military is low, and public support for sending troops anywhere around the world is even lower. No politician would ever voluntarily send out troops, especially after what happened in Somalia. One report of a death in the news is sufficient to get the CBC and other media outlets excited – just interview the family of the deceased. In the face of crying families, politicians here do not have the spine to say that our entire army consists of volunteers and accept the fact that they could die on active duty. As a result, our armed forces have atrophied and our ability to project force abroad has diminished to zero. The politically easy decisions have had some unintended consequences of which I believe we will face sometime in the next 20 years.

What do I mean by this? Let’s pretend some Iranian terrorists, in the name of Al Quida or some Islamic extremist group decides to blow up the CN Tower, or the Parliament buildings, or some target of opportunity in the country? The reason why, just like after the 9/11 take-down of the World Trade Center, is irrelevant. Terrorists make up any convenient excuse, such as “Get your troops out of Afghanistan or we will behead all Canadians across the globe!” or “Cease all economic activity with the United States!” What could we really do about it after the deed is done? Let’s get serious – our focus on security and national defence is presently a joke. Can we really trust our government that blows a billion dollars on a dysfunctional gun registry to stop true terrorists from immigrating into our country? Somehow, I doubt they’d even stop Osama Bin Laden himself from getting refugee status if he decided to pay us a visit.

The answer to a terrorist attack in this country is what we are doing currently in the case of Zahra Kazemi: whining to the UN, praying that the US will support us in the hunt for those responsible, and a petition to the International Criminal Court to “bring the accused to justice”. Now that we’ve exhausted our defence cards with the United States, do we really think the UN and the ICC can do the job? I think not. They both have no teeth.

“There is no avoiding of war; it can only be postponed to the advantage of others.” – This quotation from Machiavelli is going to become something ingrained in the brains of our country in due course, for we have given the enemies of this country 50 years of valuable time to catch up and grow the capability to do harm to us. It initially starts with injustices performed on Canadians abroad; it will end with injustices performed on Canadians domestically. The public and the politicians are not proactive thinkers in this respect; I just hope when the Canadian version of “Pearl Harbour” occurs, we will be able to grow our teeth back again and never forget why we need them – only when you carry a big stick will countries listen to you.

Stephen Den Beste has posted an article about how he believes Bush will win the next US election. His analysis, as usual, is quite accurate. It’s also got striking parallels to why I believe the BC Liberals will win the next provincial election. The simple fact is that you don’t want to shoot bullets from your gun until it’s closer to the election date. In the case of the Republicans, they are taking some serious heat from the Democratic party in various forms. The problem for the Democrats is that the election isn’t today – it’s on November 2, 2004. Likewise, the problem for the NDP is that the election isn’t today, it’s on May 17, 2005.

There are various facilities out there to put money where your opinions are. In the event of the US presidential election, Tradesports has the most liquid contracts for betting on the outcome. Currently, you can bet Bush to win at 51.2% and Bush to lose at 50.4%. What this means is that you can risk $5.12 for a reward of $4.88 if Bush gets elected; conversely if you want to bet against Bush, you risk $4.96 for a reward of $5.04 in the event if he does lose.

I do not think that Kerry will win. Accordingly, I am looking for a entry point to purchase contracts that Bush will win the election. At current prices, I am receiving slightly less than 1:1 odds on Bush’s victory, which I do not feel is sufficient. I need better odds.

This is a chart from the 2000 presidential election futures from the Iowa Electronic Markets. The only difference between these contracts and the ones provided by Tradesports is that the Iowa contracts are based on who wins the popular vote, not the electoral college (which is what decides who becomes president). You can see that the Democrats were heavily favoured (up to 70%) a couple months before the election. Although Al Gore eventually won the popular vote, he lost the election.

This time around, I don’t think it will be quite as skewed as 70/30. However, I can take a good guess at predicting when there will be the maximum sentiment against George Bush getting re-elected. It won’t be now, but it will be in a few days from now after the Democratic National Convention is concluded – this is when the peak of anti-Republican rhetoric will have all the pollsters showing results with Kerry firmly in the lead. My best guess is that this will take Bush down to a 40-45% probability of winning, which is when I will start purchasing contracts.

The BC Liberal’s probability of winning, if people could bet on them right now, would probably have a similar curve approaching the election.

Martin has recently posted an interesting story about how the PETA had one of their undercover operatives at a chicken processing plant take hidden footage (20MB, zipped MPEG file) of how the chickens were processed. Specifically, it shows a bunch of workers throwing what appeared to be live chickens against a wall, kicking them, and stomping on them.

The obvious discussion is on the moral or philosophical aspects of killing chickens – specifically, if they are going to die anyway, does it matter how we kill them? This sort of question is your typical fire starter for ethics classes. The issue has been argued many times over, and I will try not to get into that argument here.

What I will comment on is the fact that it appears that the food processing industry involves considerable amount of manual labour when it comes to killing animals. I have no clue what those people were doing on the assembly line (breaking chicken necks?), but it appeared to require a lot of people that were next to some sort of conveyor belt. You would figure that there would be some sort of technological solution that would involve the humane killing and processing of chickens. Why does the job need to involve so many people? Is it because people are cheaper than the machinery to do the job? Or is it because machines are incapable of doing the processing?

I am considerably ignorant of the processes in the food processing industry concerning chicken. I suspect a lot of people are. I only have this vague notion of how processed food reaches my plate from the farms to the manufacturing facilities. I strongly suspect that if more people were fully aware of the operational expertise it took to process food on a massive scale, the awareness that PETA is trying to bring to the public would have more effectiveness. Otherwise the shock value of these videos won’t have long-lasting effects.

I do know that in the cattle industry, however, that when cattle are killed, they are typically killed with a metallic bolt that is driven through their skulls. The cattle are rounded up in a single line that leads to this specific pen that is equipped with the bolt. Once the cattle’s head is aligned up with the bolt, somebody presses a button, and the cattle is quickly killed as their brains get ploughed with the bolt. It’s as if they got shot with a sledge-hammer.

Does knowing this want to make me eat steak and hamburgers less? No. What if cattle were hung by their utters painfully until they bled to death? Would this change my meat consumption levels? Probably not. How about if the price of meat tripled? Now that’s something that would get me to look at my diet a little more carefully.

Going back to our cattle example, driving a bolt through the skull is ruthlessly efficient. It’s probably the cheapest method of killing the cattle once you’ve setup the hydrolics. Hanging cattle by their utters (and causing them a lot of pain in the process) is inefficient and those costs will ultimately end up in the price of cattle. Likewise, kicking, throwing and stomping on chickens is inefficient – the time spent abusing those chickens could have otherwise been spent processing other chickens. This inefficiency in labour ultimately ends up costing the consumer money.

I remember hearing stories about farms having their chickens de-beaked because they tend to fight and poke each other’s eyeballs out. Animal rights groups were onto this story and once that got out in the public, a certain fraction of farmers began to use free-ranging chickens that were not de-beaked. I don’t think they were very successful since they had a difficult time competing on costs because of economies of scale – de-beaked and confined chickens simply produce more eggs per unit of area.

It’s clear that trying to get people to stop eating meat because of how the animals are killed isn’t going to have too much effect on the public’s consumption. If PETA was truly concentrated on their goal, they would try to find a way to increase the price of meat. By alerting the public of inefficiencies inside the factories (i.e. the torture of live animals), they might ironically have the end-result effect of increasing the efficiency of killing of animals inside these food factories. What if this spurs development of a machine that can work at the speed of a hundred workers on the assembly line? The price of chicken would crash and consumption (and thus animal killing) would increase.

PETA is assuming that the public will eventually demand that the food processing companies will comply with some burdensome amount of requirements and thus increase the price of food. Companies won’t listen because they know that the majority of the public really doesn’t care about how their food arrives on their plates, as long as it is safe and inexpensive. PETA needs to use a different approach than the shock-video they are using to fufill their long-term objectives.

My thoughts from my previous entry on Martha Stewart have not changed – she’s guilty of a crime and deserves to get sent to jail. You can almost read her mind by reading this news article of her reaction after sentencing. It’s still clear that she thinks she’s above the law.

I already think the sentence she got was relatively light – if she gets off on appeal, what type of message is this going to send to the public? That you can use your status as a celebrity and “helping millions of people” as an excuse to commit crimes? At least O.J. Simpson smartly kept his mouth shut after his legal team literally pulled a “get out of jail free” card out of their collective rears.

If you want to read an interesting story about Stewart, specifically about how her real-life personality is nothing like what she appears on camera, then look no further than Christopher Byron’s book, Martha, Inc. Pick it up from your library and give it a read. See if your opinion about Stewart’s motiviations change then. Chris Byron is one of the best financial columnists that I’ve ever read, and he’s written up an excellent book.

Kevin Falcon is currently BC’s minister of transportation. He was appointed in this position after the latest provincial cabinet shuffle in January 2004, where previously he was the minister of deregulation. He has been responsible for many significant events that have occurred in the BC Liberal’s administration: privatizing BC Ferries, selling BC Rail, getting RAV back on track, and finally, construction of a proper four-lane divided highway that will link Highway 1 to Highway 99 North (Sea-to-Sky highway). It is the latest development that I will be discussing in this article. The government press release is here.

Because Highway 99 is mostly 2-lane, it is difficult for traffic volumes to increase from Vancouver to Squamish and Whistler. While this isn’t immediately a problem, it will become a problem as those two towns continue to develop. Also, the capacity on the road is not sufficient when the 2010 Winter Olympics comes, so they are expanding the highway. There is the residual concern of safety on the highway, but if any of you have driven it, the primary frustration is the idiots that don’t know how to drive through the many curves it takes you on. Incorporating frequent passing lanes relieves this frustration since the speed demons on the road (like myself) want to get to Squamish from Vancouver in an hour flat, not the two hours that some of the “Sunday drivers” take.

One phase of the highway expansion has to deal with four-laning the area where Highway 1 intersects with Horseshoe Bay. On the map, the proposed tunnel is in red (note the on-ramp from the main highway), while the approved plan is in blue. The provincial government held a public consultation (Zipped powerpoint file, 9.2 megabytes) as to which route to explore. There were two options presented: a four-lane divided highway, or a two-lane tunnel. From an engineering perspective, it’s really a no-brainer decision: by going with the highway, not only do you increase the capacity of the road network, but you also keep the highway divided, which is an important characteristic to keeping the traffic fast (hence the 80 km/h speed limit you will see there). In addition, the tunnel is more expensive than the overland route.

So if it was an engineering slam-dunk decision, why is the municipality of West Vancouver protesting this decision (they wanted the highway). They claim the answer is sustainability, but everybody knows that this is a catch-phrase for wanting to see as little traffic going through their city as possible. The other claim is that building the highway is going to plough through a hectare of land in a forested area, but the sharpest comeback was when Falcon stated:

“I think we should also be clear that West Vancouver’s plans to develop 1,200 luxury homes and a golf course in that very same area will also have environmental impact and while I recognize that West Vancouver will do everything in its power to ensure they minimize those impacts, we will do exactly the same thing {with respect to the environmental impact}.”

It is extremely ironic that the opponents of the RAV line claimed that tunneling exhibited too much of a risk and was too costly, while opponents of this highway expansion claim that tunneling is the prudent thing to do. Something just doesn’t add up in the name of sustainability. Do they wish to see hundreds of cars idling on the road instead? Something makes me think that’s exactly what so-called “sustainability” proponents want to see, gridlock and congestion.

Have any of you taken a look at Windows update lately? None of these vulnerabilities involve Windows NT4. It appears that running an unfirewalled Windows XP, combined with using Internet Explorer for your main browser, in addition to Outlook/Outlook Express is the perfect recipe for getting your computer taken over remotely.

My firewall logs at least one intrusion attempt on TCP ports 135 and 445 an average of every 5 seconds – the amount of PCs running out there that are causing this much junk traffic is unreal. Even taking a look at my HTTP logs, I can see attempts at old buffer overrun exploits of IIS quite frequently. For example:

24.87.100.55 sacha.rdix.com – [16/Jul/2004:04:23:45 +0100] “GET /default.ida?XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX%u9090%u6858%ucbd3%u7801%u9090%u6858%ucbd3%u7801%u9090%u6858%ucbd3%u7801
%u9090%u9090%u8190%u00c3%u0003%u8b00%u531b%u53ff%u0078%u0000%u00=a HTTP/1.0″ 404 146 “” “”

See those X’s before the exploit code? All webservers on the internet get multiple instances of this garbage every day, which inconvienently fills up my webserver logs. It should be fairly easy for internet service providers to put a monitor on their routers and promptly disconnect machines that are spewing this filth and effectively cut them out from the internet until they can reformat their machines. Just like with spam, the rest of the internet shouldn’t have put up with this nonsense.

The government of Alberta announced that they are setting aside $3 billion for paying off existing debt maturities that will expire in December 1, 2005. This is an awesome achievement that was greatly assisted by a massive amount of oil and gas revenues over the past few fiscal years, but I doubt that any other jurisdiction in the country would have the balls to wipe out the debt instead of spending the money away to buy votes. Ralph Klein is one of the rare exceptions in Canadian politics in that he committed to a goal and didn’t piss away the opportunity to do so, which is why he’s been premier for 12 years now. Helping the matter is that he has a lot of political capital to spend.

When governments are faced with having higher tax revenues than expenditures, they have three options. They can increase spending, reduce spending or reduce the debt. Votes are easily bought with more people if you increase spending than the other three options. Cutting taxes is initially popular, but the public usually can’t make the connection to increased economic performance long after the cut is performed. The unfortunately reality is that the best return to the public is usually when they pay the debt, but this is the least sexiest of the three options: paying debt fails to please anybody without any fiscal sense, which unfortunately is most of the populace.

I can’t see how anybody could be opposed to governments reducing their debt – every dollar they spend to reduce the debt is a dollar that won’t have to be collected in taxes in the future. In addition, as interest does not have to be paid on debt that is paid off, that money can be funneled towards either more debt reduction, tax cuts or increased spending. Since Alberta has paid off their 22 billion debt, that represents approximately $440 every year that each person in Alberta do not have to pay for each year they are in the province. They can use this money to spend on things or reduce taxes.

A National Post article describes one protester’s words when Klein announced that the debt was paid off:

Mr. Klein was briefly distracted during his speech by a protester who shouted at him from the front row of spectators a few metres away. Donna McPhee screamed for several minutes about how the province had ignored the underprivileged. “How many people have been killed? How many people have been mutilated?” she said.

This has got to be the lamest protest quotation I have read in some time. If one went and examined the 20-year history of Alberta, spending has increased dramatically (columns 11-15 in the document) from $14.3 billion in 1998/99 to a projected $21.7 billion in 2003/04, a whopping 52% increase in spending! With that much government spending ($2300 per Albertan per year), how the hell can anybody complain that they’re not doing enough? In fact, my initial concern would have been that the spending increases must slow down because when the oil and gas revenues start to decline, the province will have to tighten up again relative to their current level of spending.

There is no real reason for first world countries to have any debt at all other than that politicians like to buy votes from people. Sometimes they go overboard – like how our federal government started the slippery slope of budget deficits in the late 60’s until they ballooned the debt into the $600 billion we have today. Eventually market realities hit the economy and the seemingly infinite stream of money is no longer available at cheap interest rates, which is why this country has done a decent job in getting its books in order.

Provincially and federally, there should be plans to cut the debt to zero in 20 years, but I doubt any politicians have the backbone to do so except for Ralph Klein in Alberta.