Double Blind

Although the price of oil has dropped by about 60% from its peak, this is in US dollars. When you index it to Canadian dollars, the drop is closer to 45%:

The net result should be about 90-95 cent gasoline at the pumps.

The real question is what happens to Alberta. What is going to happen to the tar sands is that capital project allocation is going to plummet next year – current projects will be completed and mined, but further development is going to stop.

In the long (3 years+) run, oil will eventually climb back up as it is a very convenient source of energy. But until then, a lot of investors in energy stocks are going to be feeling a lot of pain when these companies are forced to scale back operations.

Although Frank McKenna would have been a shoe-in for the Liberal party leadership, there is a very good reason why he declined – it would take 10 years to rebuild the party, and being 60 years of age himself, would take too long before he could become Prime Minister. John Manley, aged 58, will make a similar decision, but he will be able to read the cards and figure that his ability to steer the party back to the political middle will be next to impossible.

The party is still trying to recover from the fallout of the Jean Chretien-Paul Martin conflict and now that Dion will be clearing the way for another leadership convention, this will cause more huge expenses for the future candidates.

Two of those candidates will be Michael Ignatieff and Bob Rae, who will reignite the rift between the party. Although they have a “cease-fire” agreement, this will not last too long before they begin to snipe at each other.

Imagine on election day you were elected by 143 votes. Feeling good, you go through the validation process (where you manually go through the tabulations of the poll-by-poll results, confirming the calculations are correct) and your lead goes down to 102 votes. There were 572 rejected ballots that election (a relatively high number) so somebody forks out $250 and goes for a judicial recount.

Then the judge discovers that there were 170 votes more than you actually had, and then you lose your seat. Oddly this is not because of the rejected ballots, but rather a gross mishandling of the original count.

That’s what happened in Brossard-La Prairie, a Quebec riding, where the Bloc Quebecois incumbent must be feeling pretty steamed at this state of affairs.

There are many other judicial recounts going on, with most of the attention in British Columbia – Vancouver South and Esquimalt-Juan de Fuca are both facing judicial recounts where Liberal candidates have less than a 100 votes separating them and their Conservative counterparts. (Update: Vancouver South – Ujjal Dosanjh keeps his seat, from a 33 vote difference before the judicial recount to 22 votes after).

The former US commissioner for the International Boundary Commission answered some questions from Fumbled Mumblings, who has turned into quite the journalist.

I couldn’t imagine this sort of interaction happening between regular people and people in “positions” before the age of the internet.

I think the worst is over.

When a trillion dollars of liquidity hits the financial system, you get increased asset prices.

Since this trillion dollars is your money, it means that if you are just holding cash your purchasing power goes lower – there’s more cash out there chasing the same assets.

The only place to dump this cash is in the equity markets.

Recall that Newfoundland, in the last federal election, had their Premier launch a “Anybody but Conservative” campaign. As the Premier’s party received 70% of the popular support in the last provincial election, not surprisingly he has a lot of clout. The results were highly effective – 6 Liberals and 1 NDP candidate was elected. Now we have the following gem from the St. John’s Times:

St. John’s Mayor Dennis O’Keefe wants to pressure Prime Minister Harper into appointing a Conservative senator or supporter from Newfoundland and Labrador to the federal cabinet. Mr. O’Keefe is launching a campaign he hopes will force the PM into putting someone from this province in the inner circle. He said naming a minister from elsewhere, as the Prime Minister intends to do, would be a disservice.

In last week’s federal election, the Conservatives failed to win a Newfoundland and Labrador seat – a result that was a goal of the Anything But Conservative campaign waged by Premier Danny Williams. With no members from this province, the Prime Minister said he will appoint an MP from elsewhere to represent Newfoundland and Labrador in the federal cabinet.

Mr. O’Keefe wants to change Mr. Harper’s mind by flooding PMO with e-mails stating such a move is not acceptable and needs to be rethought. The Mayor suggested there are other alternatives, such as appointing a senator or non-elected Conservative supporter from the province.

Isn’t one of the purposes of electing representatives of the government party to the House of Commons so that you can get cabinet representation?

Remember on the first day of the election campaign that the Prime Minister visited Richmond? There was press about how he visited a family in Richmond. For example, the Hill Times says the following:

Then there’s the mainstreaming. You recall Harper’s breakfast with the (Chinese-Canadian) middle-class family in Richmond early in the campaign where the focus was on middle-class issues and the props were Playmobile toys in the pristine backyard—no dragon dancers.

For the public record, the Playmobile toys were already there from the family and it was just too convenient visually to remove them from the scene, and thus they were put behind the Prime Minister. The “pristine” backyard (which had pretty good grass) had other miscellaneous things thrown into the small tool shed in the back simply for the simple reason because there were a hundred people from the media that were going to be there (see the picture below) and they couldn’t be tripping over stuff. The lawn, after having a hundred people trample over it, was worse for wear.

It’s difficult seeing the media spinning something that is obviously not correct, but then you have other media using that media as an “authoritative source”, and thus the chain of misinformation starts.

This is almost becoming an annual tradition – the yearly response to the BC Budget Consultation. Here are my answers, and I highly encourage others to post theirs on their sites. Please note you have until October 24, 2008, to get your answers in.

Q.1 By law government must table a plan each year showing how the money generated by the tax on carbon emissions will be returned to British Columbians. Which taxes do you want to see reduced next?

Reduce the motor fuel tax. However, I was under the impression that this has already been budgeted all the way out to 2011.

Q.2 Given that the Province has committed 2/3 of all new spending in the next 3 years to health care, what choices would you make on other priority investments in 2009?

Transportation infrastructure. This would include rapid transit and roads.

Committing 2/3rds of all future spending increases to health care, however, is really crippling other departments, such as child care, education, etc.

Q.3 Government has now reduced its debt from government operations to a level not seen since 1991. How should we invest the savings from lower interest payments on the reduced operating debt?

Invest the savings in further debt reduction, with a goal of 0% of debt to GDP in 20 years. If you consider this means applying a billion dollars of surplus to the debt every year, this is not a difficult task especially when the interest savings are compounded into debt reduction.

There is no excuse for a first world province in a first world country to not have a goal of paying down debt entirely over a reasonable timeframe. Living within ones’ means is the ultimate form of sustainability!

Q.4 What other measures would you like to see in budget 2009?

Keep operating spending increases at the rate of inflation. This is not a good year to be fancy with spending since it is imminently clear that the natural resource royalty revenue will be dropping significantly.

The carbon tax should be reversed since it is clear that the tax has now moved to the phase of being used for power-brokering purposes (e.g. the recent deal with the municipalities in exchange for a grant for the amount of carbon taxes they pay) rather than a tax for an environmental benefit. This will mean that the corresponding income tax decreases will be reversed as well, but so be it – the elimination of another bureaucracy to account for carbon taxes will be well worth it.

If the government was really sincere with reducing fuel consumption across the province, the simpler measure would have been to increase the motor fuel tax rather than enacting a whole new tax.

My absolute error in terms of seat predictions was 36.

Party – I predicted – Actual – Error
Conservatives – 130 – 143 – 13
Liberals – 94 – 76 – 18
Bloc Quebecois – 49 – 50 – 1
NDP – 33 – 37 – 4
Independents (Andre Arthur, Bill Casey) – 2 – 2 – 0
Green ZERO – 0 – 0

The UBC ESM beat everybody else, with an absolute error of 29.5 seats, Laurier Institute was second, and I tied for third with Greg Morrow’s DemocraticSPACE and Ekos with 36.

The true winner, of course, is Jordan Bateman, with an absolute error of 18 seats. Another reason why you should vote for him for Langley Township council.

My regional splits underestimated Conservative performance in Atlantic Canada and Ontario. I also was expecting a popular vote of roughly 35% for the Conservatives, while they hit 37.6%. 2.6% here would be a “miss”.

On the UBC ESM, my predictions of a Conservative plurality, and minority government were accurate, with the Bloc Quebecois getting a lot of popular vote (my average buy-in was roughly 9.3% while the Bloc got about 10% of the vote).

Not very often I see myself quoted in the Vancouver Sun… come to think of it, this was the first time:

“It blew me away,” said campaign manager Sacha Peter.

It was an absolute pleasure working with everybody on the Richmond Conservative campaign team.

Richmond Electoral District, 2008, validated results:

I’ll do some more electoral post-game analysis later.