Canadian policy re the Americas

The federal government has made some constructive comments about Honduras this past month. Peter Kent, incorrectly identified by the New York Times as Canada's Foreign Affairs Minister (he is, in fact, a more junior Minister of State for Foreign Affairs (Americas)), was quoted as saying "[t]here has to be an appreciation of the events that led up to the coup."

Kent has also argued against attempts by Zelaya to return absent a "mediated solution" and today said that Canadian military and development aid would continue to flow to the beleagered country. The Canadian Press story on the aid situation draws a contrast with the policy of the Obama administration, raising interesting parallels with Colombia:

In a thinly veiled slap at U.S. congressional Democrats who oppose a trade deal with Colombia due to rights concerns, Canadian Prime Minister Stephen Harper used a trip to Bogota to present himself as a steadier ally.

So I have to give Harper his due here. With respect to Colombia, he told the Wall Street Journal in February that "[i]f we as the major countries of this hemisphere cut an ally off at the knees we will pay a tremendous price for it." Although the prime minister's policy on Israel ("[m]y government is a very strong supporter of the state of Israel") is problematic (something I will address in a future post), Harper's 2007 speech to the US Council on Foreign Relations calling on the US to support Colombia was one of his finest.

But conservative ideology should not drive foreign policy any more than liberal ideology. What matters is the facts and the particulars of the region at issue. And on that front, I would refer Honduras watchers to this lady ex-pat's blog.

carbon capture redux

Wildrose Alliance leadership candidate Danielle Smith addressed environmental policy today. Danielle called for the cancellation of the Stelmach government’s $2-billion Carbon Capture and Storage [CCS] Fund, a program that deserves certainly deserves the ax. But before explaining why in more detail, I'd note that Ms Smith would also "support research into clean coal, hydro, biomass, geothermal, hydrogen, nuclear, wind and solar power, while improving how we meter and price electricity." The pricing mechanism is critical in terms of consumer incentives, although I should avoid reading too much into what Danielle means here. She wisely notes that any "incentives" should be "broad" and warns against trying to "predict winning technologies through subsidies to individual firms or technologies". Which is all great, so why not run with this and support the broadest, least distortionary tactic available to government: a tax on the consumption of "un"clean energy?

One of the reasons why I do not support the federal Conservatives is because they demagogued the idea of a carbon tax so outrageously last election. Never mind that respected conservative economists like Greg Mankiw support the idea. No one would have to pay a carbon tax that they did not want to if they were willing to put enough effort in using alternative energy. Yet the Tories, consistent with their preference for narrow incentives over broad, would evidently prefer the highly illiberal approach of regulation.

What about cap and trade, which is the approach being taken by the US House of Representatives? An LA Times article attacks the idea, quoting from the Financial Times of London, which observes that "Carbon markets leave much room for unverifiable manipulation. [Carbon] taxes are better, partly because they are less vulnerable to such improprieties." Having studied this issue while working for the Financial Markets Division of Finance Canada, in coordination with Natural Resources Canada and Environment Canada, I have to add my own view that the FT is entirely prudent in its skepticism. If the financial crisis of 2008 taught us anything, it is that instead of revealing true value, markets can obscure it if the incentives of the market players are disconnected from true price discovery and the connection to the fundamental price driver (in this case a political policy) is too remote.

But what about subsidies for carbon capture? I've condemned this idea before, but it is worthwhile pointing to some more recent studies. Dave Cournoyer notes that the chairman of an Alberta advisory council believes that carbon capture and storage will "at least double" electricity prices in the province, and calls attention to a U of Calgary researcher's view that “[l]ittle of the oil sands' carbon dioxide can be captured because most emissions aren't concentrated enough." Costs for the US' flagship clean coal project, FutureGen, which was meant to test carbon capture and storage, spiraled so high that the government canceled it in 2008. A Reuters story from March says "many experts say burying carbon from coal-fired power plants will still be in its infancy for years beyond 2020." A recent report from Harvard's Belfer Center found that, until at least 2030, "[c]osts of abatement are found typically to be approximately $150/tCO2 avoided". Many environmentalists, whose opposition the Stelmach government hopes to buy off with billion dollar subsidies for carbon capture, are not keen on the idea either: Greepeace calls it a "scam" and, according to another FT article, in Europe "CCS could become mired in a political and regulatory thicket before it can ever be deployed."

I have to agree with Alberta Liberal energy critic Kevin Taft: "If it comes down to a choice between carbon capture and storage or hospital beds, I for one am going to choose hospital beds."

The Hurt Locker

I saw "The Hurt Locker" at the Garneau cinema near the U of Alberta campus Sunday. Although a review at the left-leaning Prospect dubbed the film "propaganda", many others say what distinguishes it from other Iraq movies is its apolitical nature. I'd first note that these two perspectives are not absolutely contradictory. Why? Because a "conservative" message is often non-verbal. The message may be received subconsciously despite the fact no message is obvious. I might add that the message might even be sent without the author/creator being fully conscious of it.

Until 2003, the University of Alberta graded on a 9 point scale, which was theoretically a stanine system meaning just 4% of a class received a 9. Although I ultimately graduated with First Class Standing during my last 2 years of undergrad, I only received two nines out of the dozens of courses I took, and one of them was for Film Studies. As I recall, all or almost all of the mark was based on a single final paper, and the thesis of my paper with that the cinema was a vehicle for appealing to a "nostalgia for the savannah", for a time and place when life was brutish and short on the one hand but simple and without need of modern analysis on the other. By communicating visually, film has a broader "bandwidth": it can deliver messages that are not apparent in the text of the dialogue. I have long believed that these sort of truths are, loosely, "conservative", in that they are not easily, perhaps not even possibly, explicable or justifiable by appeal to abstract argument. It's like trying to explain the colour "red" to a blind man. You can't, because organisms understand the phenomenon directly as opposed to abstractly. The idea of a depth psychology, that humans are not fully rational, is a key element of "right wing" thinking. Although I did not use the Lord of the Rings trilogy as an example of the "nostalgia" I talked about (the first of those movies not being released until 2001), I perhaps could have. It always amazed me that liberals could laud Lord of the Rings when at its core is, to be perfectly blunt, a race war.

But I digress. "The Hurt Locker" has a message, and it isn't one that is clear in the early goings (watching it, early on I thought the film was going to be far too cliched). The message is that the protagonist, Staff Sgt William James, is alienated and abnormal... as natural warriors are. Sgt JT Sanborn is the normal one: he becomes disillusioned by the stupidity of war and becomes increasingly interested in survival and the idea of family as the story progresses. Although Sgt James is described as "addicted" to war, I'd rather say that he does not believe he can really find the meaning of life apart from a proximity to death. And so a conventional existence as a husband and father with a white picket fence and a 9 to 5 job leaves him unsatisfied.

Where the "propaganda" comes in is in the subconscious message that Sgt James' type is necessary: a society without warriors is either impossible or stagnant and lifeless. One review comment I came across complained about the use of the countdown to when the team's tour is over. The countdown is, in fact, critical, because it sets up the walloping effect of the restarted countdown for James at the film's dénouement. One gets the full blast of subconscious identification with the dragon slayer archetype at that point.

Where the apoliticalness comes is in the implied suggestion that Sgt James is no hero. He's stupid tactically and disturbingly short on empathy.

The bottom line is that this a good, if not great, movie since it has something of the "iceberg" effect of great film and literature: one feels there is more there than is readily apparent.

Alberta Federation of Labour vs pension reform

Although MIT economist Jonathan Gruber told Congress

It is clear to me... that one source of financing dominates the others: reducing the expensive, regressive, and inefficient subsidization of employer-sponsored insurance. Financing coverage expansions by scaling back the exclusion would be highly progressive and would reduce a major driver of overinsurance and excessive health spending in the U.S. This is truly a win-win solution...

as I noted in my last post, unions south of the border are pushing back, threatening to strangle healthcare reform in its crib:

Douglas Elmendorf, head of the Congressional Budget Office, told Congress last week that "the cost curve was being raised." ... Elmendorf favored limiting tax-free employer-provided health benefits, but organized labor remains strongly opposed.

A limit on tax subsidies for the costliest health insurance plans would give households and employers a reason to become smarter shoppers but unions are opposed. It can always be demagogued as a Republican idea, as Ezra Klein notes:

Republicans ... have made unwinding the employer-based market core to many of their proposals. It was in John McCain's proposal and Tom Coburn's proposal and every other GOP draft I've seen. It's also central to the Wyden-Bennett plan that has attracted a number of Republican cosponsors.

While unions are thus busy blocking attempts to raise the necessary taxes to fund US healthcare reform (apart from soaking the rich, a move that is far more inefficient and too sharp a left turn to get through Congress), north of the border readers of today's Calgary Herald would learn that

[Alberta Finance Minister Iris] Evans said if agreement on a national program can't be reached, the province is willing to continue working with B.C. on a supplemental pension plan which would allow the self-employed and workers to sign on. ...
But Bill McGowan, president of the Alberta Federation of Labour, [is opposed]....

The parallels to the US healthcare debate should be clear here. The fact that millions of (non-union) Americans do not have adequate healthcare is something of a national embarassment in terms of social justice, as is the fact that millions of (non-union) Canadians do not have adequate retirement savings. Yet the union lobby has no interest in solving either of these problems because these are not problems they face. Note the argument of AFL-CIO President Sweeney:

the ... claim that the the current tax exclusion favors those with coverage at the expense of those without -- even if it were true -- is completely inapplicable when everyone is covered -- an essential goal of reform.

This is simply false. Soaking the rich with high marginal rates on their investment income may indeed pay for covering everyone (at significant cost to investment levels and, ultimately, total output). But that does not change the fact that the tax measure at issue favours one group over another without any justification on either efficiency or social justice grounds.

In Alberta, within coming months union interests are likely to argue for enriching CPP and OAS payments. Never mind that unionized worked don't need this; in the interests of "equity", the unions will argue that everyone should benefit from any new social programs. When it comes to the advantages that unions secure for their members via their monopoly power, this is supposed to be "inapplicable" to both social justice and efficiency considerations. In the debate about whether the free market distributes fairly enough and who should give up more, we are thus supposed to ignore the distortions created by union power.

The Herald goes on to say that Jack Mintz has been appointed to study the issue. Mintz was previously appointed to study the issue of Alberta's lack of savings (a problem that goes directly to the topic of supporting the province's seniors in the future) and his report was at first suppressed and then ignored. Rather than stay home and listen to Mintz, Finance Minister Evans spent $24 500 on transport alone on a January junket to Europe "to study savings strategies, pension management and economic development."

Harper "conservatives" dance to union tune

As a follow-up to the Economist's reference to union interests blocking intelligent healthcare reform in the US at the end of my last post I would direct readers to Ezra Klein's blogspot on WaPo asking Will Unions Kill Health Care Reform?

I haven't followed Ezra Klein closely because I've been a bit skeptical about how authoritative this kid with a social sciences Bachelor of Arts can be on economics. But his lack of an advanced degree in the subject and his poli sci background may actually make him more of a necessary read as opposed to less because he has more of an interest or ability to see the politics involved in policy than the PhDs in the ivory towers.

His post from May 28 is telling: here's a progressive blogger who sees that the union attack on the liberal Democrat sponsoring the Senate's version of a progressive healthcare bill follows from the fact "the poorest among us would get slightly more and AFSCME [and the UFCW's union] members might get slightly less."

One thus need not look much further for why Obama has failed to step into the debate going on in Congress to really get a bill moving. He could either go to bat for House leader Nancy Pelosi's union coddling bill that is "so far to the left of American political discourse" (to use the Economist's words) it would damage his re-election prospects or he could back the Senate bill, which would mean adopting a tax increase that he slammed McCain for supporting:

Senator McCain doesn't think it's enough that your health premiums have doubled. He thinks you should have to pay taxes on them too.

Obama allegedly spent more than $75 million in October alone trying to hammer home this "tax raiser" accusation. Never mind that McCain would have eliminated a tax cut that the most influential Congressman with respect to the healthcare debate, a Democrat, calls "regressive": "It’s too regressive," said Mr. Baucus, the [Senate Finance] committee chairman. "It just skews the system."

Are Canadian politicians equally in the tank for unions? Consider a July 17 headline: Steelworkers Union Applauds Clement's Actions Regarding U.S. Steel. At a time when the demand for steel has collapsed (US Steel reported a first quarter loss of $439M, and plants operating at as low as 38% capacity), the Tories are going after US Steel for layoffs. This despite the fact US Steel has already said it will fund Stelco (which US Steel acquired in 2007) pensions and repay $100M loaned to it by Ontario. A senior fellow at the Hudson Institute warns at the protectionist message being sent, but, like their Alberta counterparts, when have the Ottawa Tories preferred an expert's advice to that of the daily mob? The only thing that gives more satisfaction than a public flagellation of big company is that of a big foreign company.

And so it was that Jim Prentice's Industry department did what no previous Liberal government had done for more than two decades under the Investment Canada Act and blocked the (attempted) April 2008 MDA acquisition. This was just one of Canadian Auto Workers Carol Philip's lobbying successes - a year later the "conservative" government agreed to bailout the auto sector to the tune of $12 billion.

Andrew Coyne was one of the few if not the only pundit calling on true conservatives to wake up and see the MDA decision as grandstanding devoid of principle. Any Tory supporters surprised by the subsequent auto bailout weren't paying attention. Note to Craig Chandler, who earlier this month was quoted as saying ""People . . . say the [Alberta] Progressive Conservatives are the sister of the federal Conservatives. We aren't related." Yes, you are. It's the same cynical manipulation of social conservatives, the same hostility to informed analysis, the same nonchalance with respect to spending discipline, the same rejection of fixed election dates, the same centralization of power in the leader's office, the same demagoguery with respect to carbon and sales taxes, the same poll chasing, the same inclination to side with union interests against taxpayers and international investors. It's why I'd take the Liberal John Manley over the Conservative Stephen Harper every day of the week and twice on Sundays. So go ahead, point to this and my support for a McCain plank in this post as evidence that I am a Republican for Ignatieff: policy questions matter to me, unlike some.

UPDATE on union power (or NDP blogger paranoia?), July 19:

After a post where "Tiny Perfect Blog" taunts the Stelmach Tories for rolling over so easily for United Nurses of Alberta, this NDP Alberta blogger expresses a need to quit blogging and go underground. Why? Because comments in the same post about the Alberta Public Employees Union being less successful in taking the taxpayer for a ride have, in the perception of this blogger, put him or her on the AUPE's enemies list!

California's top income tax rate higher than Sweden's?

The current top marginal tax rate in the USA is 35% according to the Wall Street Journal. But with the increase scheduled for 2011 under President Obama's budget combined with the increases in the health care bill presently before the House, the average top federal rate is expected to rise to 47% or 48%. The top bracket in Canada is currently 29%. Figuring in state taxes, top income earners in Oregon, Hawaii, New Jersey, New York, and California would all be looking at Sweden's top rate of 56% or higher. Meanwhile, 47% of Americans pay no income tax at all.

Now this does not mean that US Democrats are going to crank up government's take to Swedish levels, since Sweden also has a 25% VAT. But when one considers that Alberta has no sales tax/VAT and has a current combined provincial/federal top bracket of 39%, the difference becomes significant (Alberta's corporate taxes are high, but then so are America's).

The Economist is not happy:

the Democratic party’s leadership plans to pay for it by imposing an ill-advised tax on business and a steep “surcharge” on the wealthy. ...

By embracing these two taxes, the House rejected the financing method recommended by most economists (and by this newspaper). The tax preference given to health insurance provided by employers (over, say, the coverage bought by the self-employed) is a market distortion that costs the exchequer some $250 billion a year. Abolishing or even merely restricting that policy could pay for much or all of the cost of universal coverage, as well as boosting labour mobility and making the cost of coverage more transparent to consumers. This virtuous policy never had a chance in the House, because union members get some of the best insurance packages.

Salutin vs Steyn

And life itself told me this secret: 'Behold,' it said, 'I am that which must overcome itself again and again.'
- Friedrich Nietzsche, Thus Spake Zarathustra

Two opinion columns, one by Mark Steyn in Macleans dated July 16, the other by Rick Salutin in the Globe and Mail dated July 17, have some interesting elements in common.

Salutin, on the left, defends Sonia Sotomayor's statements about the importance of her Latina identity by arguing that one's experience of overcoming life's challenges can "put us more in touch with what it is to be human" and that situating this experience within an identification with a visible group is existentially important:

Speaking as a Jew, I think one reason North American Jews identify so powerfully with Israel is a sense that the soulfulness of past Jewish experience is missing in their generally comfortable lives. They'd never want to repeat the horror, but they miss the intensity.

Meanwhile, on the right, Mark Steyn argues that

when government takes too much of the trouble out of things, it makes it impossible to lead a satisfying life. “Trouble”—responsibility, choices, consequences—is intimately tied to human dignity. And thus the human dignity in working hard, raising a family and withstanding the vicissitudes of life has been devalued. And society is just a matter of passing the time.

As if the Romantic sentiment expressed here needed to be more explicit, Steyn suggests that in today's modern welfare states, people's lives cannot read like "a 19th-century social novel" when maybe they should.

What's remarkable about this is that both writers argue that the members of ethnic groups within larger society should maintain their unique cultural identities for existential reasons. Although Steyn does not suggest that people experience Nietzsche's "overcoming" qua Latina or qua white male in his column here like Salutin does, from Steyn's other writings it is obvious that Steyn believes cultural identities should be preserved.

Where the two part, is that Steyn believes the preservation of cultural identities means limiting immigration. "Larger society" in the above paragraph thus means human society, not a multicultural nation-state. It's a key reason why he calls himself a "social conservative" (which he does in this column). For Salutin, one presumes that "larger society" can be a sub-global group, a nation state, and that it's permissible, even advisable, to take pride in one's particular heritage if the group one identifies with is struggling against oppression as opposed being the agent of oppression.

Now I'll grant that I am forcing Steyn and Salutin into boxes in order to make my argument. But my point is not really about what Steyn and Salutin believe anyway but rather what I am suggesting the right and left in general believe.

The true libertarian would disagree with both Steyn and Salutin because the views of Steyn and Salutin both follow from a Nietzschean depth psychology instead of fully conscious reason. The libertarian would point out that logic, and therefore right and wrong, does not change with a human's concrete particulars. And so it is that the libertarian finds Sotomayor's statements unacceptable for a would-be judge in a pluralistic society, the white male conservative finds them unacceptable because they imply a bias against his group, and the leftist finds them acceptable because a bias is appropriate when it is being applied on behalf of the long suffering underdog. For the libertarian, it is the process that matters and the abstract process alone. For the leftist and the conservative, concrete results matter as well because they are skeptical about the perfectibility of the process.

the costs of the Charter

In 1985, the Supreme Court of Canada issued a decision (Singh v. Minister of Employment and Immigration) that held that "The term "everyone" in s. 7 [of the Canadian Charter of Rights and Freedoms] includes every person physically present in Canada..."

According to Immigration Watch Canada

In 1981, in the Pre-Singh Decision period, 3450 refugee claims were made in Canada. In 1987, two years after the Singh Decision, over 25,000 refugee claims were made. Also in 1987, a backlog of 85,000 refugee claimants had accumulated and these people were given amnesty.

Today, according to Jeffrey Simpson's must read G&M column:

It's a situation linked to a 20-year-old Supreme Court ruling (the Singh case) that led to amnesties, administrative chaos, bureaucracy, huge financial costs and, eventually, to the existing refugee-determination system.
Under it, Canada has to process anybody and everybody who comes to this country and claims refugee status, bogus or otherwise. To try to stem the flow, we impose visa requirements.

In April of this year, I decided to change my flight to South America from Santiago, Chile to Buenos Aires, Argentina, because otherwise I would have had to pay 132 USD to enter Chile by air (I entered Chile by land about a week later). Why 132 USD? Because Canada requires Chileans to have a visa (and pay an associated visa fee) for entry into Canada. The Chileans call it a "reciprocity fee". And why that visa requirement? As Simpson explains:

In 1996, there was a surge of phony refugee claimants to Canada from the Chilean port of Valparaiso. Word had got around in a poor neighbourhood that Canada was an easy mark. These obviously economic migrants were told: Apply for refugee status in Canada, get into the multilayered refugee-determination system and melt into Canadian society. And the chances of getting caught, or being deported, are next to nil.
Canada responded by slapping visas on all Chileans wanting to come to Canada, even though Chile had thrown off dictatorship and become an admirable country.

Simpson concludes "We incur large costs in money, time and bureaucracy (or what the Supreme Court airily dismissed as matters of “administrative inconvenience”). We get big backlogs in the system." Yet can one really fault the SCC? For once, our Supreme Court actually took the words of the Charter at their plain meaning (it says "everyone", not "Canadians" or "Canadian citizens") as opposed to, say, the 1995 Egan case which managed to find the words "sexual orientation" in the following Charter section:

Every individual is equal before and under the law and has the right to the equal protection of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

It's thus fair to say that when you hand over your 132 USD at Santiago airport (or pay for a visa to enter many other countries of the world), that fee exists as a direct consequence of the Charter:
the Charter says "everyone"

hence

kicking someone out after arrival is a massive legal process

hence

there has to be some speedbump BEFORE arrival

hence

visa requirement

hence

reciprocal visa requirements for Canadians abroad

132 USD, however, pales in comparison to the tax revenues that support the Canadian refugee review system. Immigration Watch estimates costs to be 2 billion per year, and that was several years ago.

goin' ta California II

From a comment dated 17 August 2008 that responds to a post on TaxProf Blog:

How do you suppose California gets into its awful boom-n-bust state budget cycles? That's right, it's because the tax system is hugely progressive. Something like half the state budget depends on the tax income from the top 100,000 earners in California.

Looking at a comparative state income tax table, one can see that California has one of the widest rate ranges in the union. The breakdown for California indicates that the top 9.3% rate starts at $64 050 for individuals (the top rate is, in fact, 10.3% but that applies to incomes over $1M). Individuals with incomes under $43 814 pay less than half this amount on a percentage basis and the marginal rate for those with incomes under $33 989 is less than half again (2%). The incomes of those in the higher brackets is more variable primarily because investment income is highly cyclical.

This does not tell the whole story, either. California has a higher corporate tax rate than average, and corporate tax revenues are significantly more cyclical than either income or consumption taxes. If one looks at a graph of recent US tax revenues, the drop in payroll tax revenue is not especially noticeable but the slump in corporate tax revenue is remarkable.

What does this mean for Alberta? Given Premier Stelmach's "no tax increases" pledge, the safe money is that Ed will try hiking royalties (again), on the grounds that royalties are not taxes. Yet royalties are the most cyclical form of revenue available to the province. Although I don't have a study to prove it, I predict that they are also the most subject to Laffer curve effects, given the inverse relationship with land bonuses and the fact dynamic scoring considerations are considerably more relevant to corporate tax policy (which royalties are most akin to) than to income or consumption tax policy.

The Premier says he wants to stabilize the boom/bust cycle, yet instead of hitching the government's revenue wagon to a relatively level tax like a broad based VAT, it appears Steady Eddie will put the bucking bronc of royalties into full harness. For the second time after getting thrown the first time.

Insanity: doing the same thing over and over again and expecting different results.
- Albert Einstein

goin' ta California

... dreaming of the moment when everything looks right ...

From this week's Economist:

[California's] roads and schools are crumbling. Every year, over 100,000 more Americans leave the state than enter it....
Ballot initiatives, the crack cocaine of democracy, have left only around a quarter of its budget within the power of its representative politicians. (One reason budget cuts are inevitable is that voters rejected tax increases in a package of ballot measures in May.) Not that Californian government comes cheap: it has the second-highest top level of state income tax in America (after Hawaii, of all places). Indeed, high taxes, coupled with intrusive regulation of business and greenery taken to silly extremes, have gradually strangled what was once America’s most dynamic state economy. Chief Executive magazine, to take just one example, has ranked California the very worst state to do business in for each of the past four years.

As if on cue, the past week's news about California's continuing descent into failed state status coincided with Alberta Premier Ed Stelmach promising "As long as I'm premier of this province, there will be no tax increases ... No tax increases, period." Apparently the Premier felt a show of authority here was necessary to convincely shoot down the tax hike trial balloons launched by the notorious lefties in his caucus: "Just Monday, Sustainable Resource Development Minister Ted Morton said taxes are inevitable because the shortfall in this year's budget is so great."

You'd think the Premier could have summed up his presser with, say, something like "read my lips: no new taxes", just to underscore how immovable he is on the topic. Instead we got "So just to close: cold beer, hot day, during very difficult economic times." Got that? You should: Ed said he was "very clear" no less than seven times.

9-0 vs Sotomayor

Last week I said that in the news of Monday, June 29 there "were two notable developments which suggest Obama may be more left than he was generally perceived last year."

One of those was the President's statements about Honduras. The US could presumptively not play the role of an "honest broker" after Obama declared Zelaya to be the only legitimate president simply because henceforth the US could officially only deal with one side (Zelaya). State department officials would refuse to meet with representatives of the new government in Honduras (and indeed that has been the case). Furthermore, "the interim government that replaced Zelaya estimates it already has been denied about $200 million in suspended credits. The United States has cut $16.5 million in military assistance and warned a further $180 million in other aid is at risk". In recent days, however, the US has been acting more even-handedly and realistically, facilitating negotiations in Costa Rica even though the US itself is "not present in the talks."

But the other news item from June 29 remains, namely, the US Supreme Court decision in the Ricci case, the same case Obama's USSC nominee Sonia Sotomayor had ruled on earlier. Senate hearings begin this Monday.

The decision in most of the media was described as a 5-4 decision to overturn Sotomayor. But in fact what put Sotomayor outside the mainstream was not her decision to not rule for Ricci and the other white firemen. The real problem was that Sotomayor apparently thought a summary decision, without detailed reasons and without further empirical inquiry into the bone fides of the city of New Haven's claims, was sufficient. Judge Jose Cabranes, a Clinton appointee and member of the arguably radical LatinoJustice PRLDEF, criticized the opinion Sotomayor joined saying it "contains no reference whatsoever to the constitutional claims at the core of this case. … This perfunctory disposition rests uneasily with the weighty issues presented by this appeal." Sotomayor was criticized by a fellow left leaning Latino judge, in other words. And what really puts her offside is the fact that

If you read Ruth Bader Ginsburg [writing for the 4 dissenting USSC judges], you'll find out it's a nine-zip decision because even those in the minority found that the 2nd Circuit botched this totally by not even having a trial. They just found for New Haven in summary judgment.

Those are Rush Limbaugh's words. However much Rush may overstate the case, the bottom line is Sotomayor should have at least ordered further proceedings. See Stuart Taylor Jr in the National Journal. Jonathan Adler, writing on the Volokh law professors blog, notes that "the fact that it took the Court nearly 100 pages to resolve this question does cast a shadow over the Second Circuit panel's handling of the case, and may raise questions about her judgment." Stuart Taylor notes that "The jury's job would have been to consider evidence that the city's main motive had been to placate black political leaders who were part of Mayor John DeStefano's political base." This is a key issue: the city of New Haven had every political reason to discriminate against the white firemen because they lived outside the city limits in the suburbs, whereas the inner city is predominately black.

The bottom line is that either Sotomayor was unable to appreciate the significance of the Ricci case, or, even worse, she did appreciate it and chose to bury it with a summary order such that Frank Ricci and his compatriots were unlikely to ever receive a Supreme Court review. As Stuart Taylor's latest column observes,

...any 2nd Circuit judge who had chanced to find and read the panel's summary order in Ricci would have found only the vaguest indication what the case was about.
But the case came to the attention of one judge, Jose Cabranes, anyway, through a report in the New Haven Register. It quoted a complaint by Karen Lee Torre, the firefighters' lawyer, that she had expected "'a reasoned legal opinion,' instead of an unpublished summary order, 'on what I saw as the most significant race case to come before the Circuit Court in 20 years.'"
According to 2nd Circuit sources, Cabranes, who lives in New Haven, saw the article and looked up the briefs and the earlier ruling against the firefighters by federal district judge Janet Arterton. He decided that this was a very important case indeed, and made a rare request for the full 2nd Circuit to hold an en banc rehearing.

The difference between Jose Cabranes and Sonia Sotomayor is the difference between a Clinton appointed Puerto Rican judge and an Obama appointed Puerto Rican judge.

political chameleons

From the Economist's July 2 edition:

The only people who don’t seem to want the president back in his job are Hondurans. On June 30th thousands of them filled the main square in Tegucigalpa, the capital, to show their support for Mr Zelaya’s removal and his replacement by Roberto Micheletti...
Mr Zelaya’s presidency has been marked by a rise in crime, corruption scandals and economic populism. He pushed through big wage increases for teachers and government workers. When money ran short, he turned to Mr Chávez for petrodollars. Despite more than $100m in Venezuelan aid, the government has stopped paying some suppliers.

The biggest hole in Zelaya's legitimacy, however, is the fact he was elected a moderate and then veered sharply left. When David Emerson, elected as a Liberal, crossed the floor of the Canadian Parliament to sit as a Conservative, the charges of political chameleon was common. Yet few seemed to consider the possibility that it was not Emerson's color that changed, but his environment's. What if a politician is elected by campaigning on platform X, and then the political party he was associated with happens to endorse a platform of "not X"? I would think that crossing the floor to another party that stood for what he campaigned for would be consistent with democracy, and failing to do so would actually be inconsistent. "Liberal" and "Conservative" are coats of paint. They are contingent, to use the term I've been employing a lot this week. What matters is the substance, and on this point the moderate policy Hondurans had voted for in the last election had been usurped by a president who decided to throw in with the Chavistas. Playing the populist card to change the constitution was one move too many from the Chavez playbook.

From the Calgary Herald:

The real information is different from what the world has been fed," said Chet Thomas, an American who runs the development charity Project Global Village, based in Tegucigalpa.
"What happened is the army disposed of a constitutionally elected president in order to restore a democratic system of government, not to break the democratic system. This case cannot be catalogued as a coup d'etat.

The official line from both Canada and the USA has been to follow the lead of the OAS, but OAS Secretary General José Miguel Insulza was a part of the government of former Chilean president Salvador Allende. Allende was the first Marxist to be elected as a head of government in the Americas, and was supported by the KGB. Given that Allende was deposed by Pinochet's 1973 coup, Insulza can hardly be expected to take a nuanced view of the deposition of a leftist president. The fact the OAS is unanimously calling for Honduras' ouster from its membership (should Zelaya not be reinstated) while more than two dozen of the 34 OAS member states are calling for Cuba's unconditional admission severely undermines the organization's credibility.

Octavio Sánchez's informative piece in the CS Monitor makes for a good read, while Roger Noriega's blogposts of this past week (he is a former US Ambassador to the OAS) make for required reading, as does Carlos Alberto Montaner's WaPo piece.

Honduras continued

According to the Miami Herald,

[Ousted Honduran President Manuel] Zelaya started distributing the ballots nationwide on Saturday. 'There were cars, buses and planes getting those ballots all over the country,'' said [National Human Rights Commissioner Ramón] Custodio, [who "defends the replacement of Mr. Zelaya as constitutional"]. 'I don't know where he got the cash to do all that.'

At 9 that night, [armed forces head Romeo] Vásquez said he was called to another meeting with the members of the Supreme Court and the attorney general, where he was shown a court order to arrest Zelaya.... 'We felt that if he stayed here, worse things were going to happen and there would be bloodshed.'

From the latest Wall Street Journal:

... populist intimidation has worked elsewhere in the region, and Hondurans are understandably afraid that, backed by Chávez agents and money, it could lead to similar antidemocratic subversion there. In Tegucigalpa yesterday, thousands demonstrated against Mr. Zelaya, and new deputy foreign minister Marta Lorena Casco told the crowd that 'Chávez consumed Venezuela, then Bolivia, after that Ecuador and Nicaragua, but in Honduras that didn't happen.'

On this Canada Day, the WSJ's suggestion that "Maybe it's time to sort the real from the phony Latin American democrats" leads one to ask just how "real" Canada's democracy is. Post-Zelaya Honduras may be democratic in substance, but is being attacked by everyone from Chavez to Castro to Obama on reasons of form, specifically, the absence of impeachment formalities (the mere formality of which should be obvious from the fact both the legislature and the judiciary want Zelaya out of office). Many people believe that Canada's Charter of Rights and Freedoms stands as a substantive guarantor. In fact, section 1 of the Charter allows Charter rights to be abridged if justifiable in a "free and democratic society". And even if such abridgements are not justifiable, a government can simply cite Section 33, the notwithstanding clause! Ultimately, Canada's democracy is protected by its prevailing culture, not the form of its institutions. The particular form of a democratic constitution is highly arbitrary. What if one of Canada's 308 MPs "crossed the floor" to the Green Party? The Green Party's representation would rise from zero percent of the seats to 0.3%. Given that the party won 6.8% of the vote in the 2008 federal election, this would not strike me as undemocratic. Yet some people would swear that it was highly undemocratic because the electorate in that floor crosser's particular riding cast more votes for another party (just look at the rage when David Emerson crossed the floor following his election in Vancouver Kingsway as a Liberal).

The bottom line is that the amount of moral weight that most people place on constitutional formalities is disproportionate: the particular incarnation of whatever the ideals are is typically far too contingent to support the absolutistic moralizing that occurs. Take the case of Abousfian Abdelrazik. Apparently, the moral reponsibility of the federal government for this man would change enormously were his historical residence status slightly different. That residency qualified him for Canadian citizenship documents, yet this man's concrete ties (non-abstract, non-institutional) to Canada are negligible (e.g. birth, dominant ethnicity, dominant religion, dominant culture, etc). If it would be inhumane to leave him to his own devices (since when is government inaction a coercive denial of one's right to liberty?) in his country of origin, how would it be more humane to take the same inaction should he not happen to have Canadian citizenship along with his Sudanese citizenship?

Being Canadian is, or ought to be, more than just having a piece of paper saying "Canadian citizen". Whether the new head of government in Honduras ought to be supported ought to be a substantive as opposed to a technical question.