Blog

Today’s post looks back to the last year or two of blogging and forward to the next year. In the past, my blog posts have often been linked closely to my classes, for example reporting on or continuing a discussion initiated in class. In the 2010-11 academic year I am on research leave, so will have no classes to stimulate postings nor a group of students who eagerly look forward (at least I can imagine they do) to what I write.

My main focus in September will be on a proposal to SSHRC for funding to do a book about narratives about private sector management, using the same approach as the book I’m completing about narratives about public sector management. Grant proposals have tight deadlines and demand intense focus, so I may go offline for a while.

After completing the grant application, I will go back to finishing the book on narratives about public sector management. So the process of writing may serve as the basis of some postings.

I may weigh in on some public policy issues as they arise. This past summer the census long-form controversy kept demanding my attention. That story is not ended, and I expect to continue writing about it. The long-form census controversy led to my post about the Globe and Mail’s Neil Reynolds, which quite a few people told my they noticed – and agreed with. The Globe and Mail has not immediately accepted my recommendation of putting the 70 year old columnist out to pasture, but maybe they will. I notice that in a recent column Reynolds used the phrase peer-reviewed research, so maybe he read my post, and has decided to be more careful in how he refers to the articles he quotes.

Finally, I should mention a big technical problem I had to deal with during the summer. My website got spammed and some malware was insinuating onto it, and I was receiving somewhere on the order of 40 comments every day that were simply links to websites in Russia or the Ukraine selling Viagra or Cialis at bargain basement prices. With the help of web consultant Wes Bos (www.wesbos.com) the malware has been eliminated and the spamming has stopped. He had to take the site down and repost it and, along the way, some content was lost. So some posts have shortened titles and others just a word or two. Right now I don’t have the time to repost it all, but in the future I may do some reposting.

For those who, like Jews and academics – I’m both — think of September as a time of new beginnings, I’d like to wish all a happy and healthy new year.

For some time Neil Reynolds published his op-ed pieces in The Globe and Mail’s Report on Business, where they generally escaped readers’ attention. Now that he’s been moved to the op-ed page, he’s getting lots of attention.

Reynolds’s take is what might be called Tea Party Canadian-style. For Reynolds, government is always parasitic and the private sector is always innovative, so that we should have less of the former and more of the latter. His second main concern is energy and the environment, and his message is that global warming and peak oil are myths, which leads to the policy prescription: drill, baby, drill. Reynolds’s Wikipedia article says that he was a Libertarian Party candidate in a 1982 by-election, and it’s clear from his columns that a Libertarian he remains.

Reynolds’s modus operandi is to find some academic research out there – often on the web sites of American Conservative think tanks – that he claims supports the policy positions he advocates. In my view, his arguments are often specious. I will cite three instances, and then connect the dots.

His column of April 17, 2010 argued that the average Canadian household spent almost $15,000 on personal income taxes and the average American household about $2000. This claim was carefully analyzed by Steelworkers’ economist Erin Weir on the Progressive Economics Forum (www.progressive-economics.ca), who showed that when appropriate data were used per capita income taxes were almost equivalent.

His column of July 26, 2010 on the census repeated the claim that the Nordic countries have eliminated their censuses, but without the qualification – made clear by his fellow Globe and Mail journalists – that this was because they use many other data sources. He also repeated the conservative economist Hayek’s argument that the prices produced by the market are society’s most important statistic. Students in first-year economics courses should be familiar with that argument. Students in upper-level economics courses learn that, if there are market imperfections such as pollution, congestion, monopolies, or subsidies, prices provide misleading information.

In his column of August 9, 2010, Reynolds argued that people will adapt to global warming because they have in the past adapted to heat waves. The evidence he gave was an article by economists Olivier Deschenes and Michael Greenstone claiming that the increase from the US annual mortality rate due to global warming by the end of this century would be statistically indistinguishable from zero. He claimed that the paper was “published three years ago by the Massachusetts Institute of Technology.”

I looked the paper up on Google Scholar. The abstract notes that the predicted mortality rate increases for some subpopulations, notably infants, would be statistically significant, and that annual resident energy consumption would increase by a statistically significant 15 to 30%.

What concerns me more, however, was that the article was not published three years ago by MIT. It was and remains a National Bureau of Economics Research Working paper. Working papers, as the NBER website makes clear, and any academic knows, have not passed peer review. Furthermore, a working paper that has remained in working paper form and hasn’t made it into a journal for 3 years is encountering difficulties in the reviewing process. It should be quoted, if at all, with caveats, and not referred to as published.

Okay, let’s connect the dots. We see a pattern of citing supposedly impeccable sources that, upon examination, doesn’t withstand scrutiny. Reynolds’s Wikipedia entry mentions a long and distinguished career in journalism but makes no mention of any university education. People generally ensure that their Wikipedia entries are accurate. My conclusion is that Reynolds either has had no university education or thinks it isn’t important enough to mention. For me, this is highly problematic for a columnist who relies so heavily on academic research. What he appears to me to be doing is citing research that seems to support his positions without much understanding of the research process. Not only is it important to distinguish between working papers and refereed work, but it is important to look at an overall body of research – the work of numerous scholars – to see if there is any consensus.

The Globe and Mail is English Canada’s newspaper of record. Its columnists should be the best in the country. The Globe is printing Reynolds because he represents the “right wing ideologue” position, just as it prints Rick Salutin (but only on Fridays) who represents the “left wing ideologue” position. I am not claiming that the Globe shouldn’t have a right wing ideologue columnist, but if it wants to have one, it can certainly do better than Neil Reynolds.

This post should in no way be considered an attack on Reynolds’s freedom of speech. He may say whatever he wants to say on his own blog or in whatever organ (perhaps the proposed Fox North channel) will publish him. But, if the Globe and Mail represents prime time in Canadian journalism, then my considered opinion is that he isn’t ready.

It intrigues me that during the entire long-form census controversy the Big Kahuna has said nothing. The initial explanation is that he is on vacation at his summer residence at Harrington Lake. The tactical explanation is that on a controversial issue the relevant minister(s) should speak for the government, as Bernier and Clement are doing, and the Prime Minister should only weigh in when the issue is close to resolution. The third explanation is more strategic, and concerns the acceptability of the government’s agenda to Canadians.

We’ve been told that the impetus for the decision to make the long-form census voluntary came from the Big Kahuna himself, from his belief that government has become too intrusive. It must be profoundly depressing for BK to see 75 percent of the electorate disagreeing with him on this issue, and to see virtually every organized interest group opposing him. The only support he seems to have is from the Fraser Institute and from so-called libertarians like the Globe and Mail’s Neil Reynolds (whom, btw, I plan to diss in a future post).

Canadians seem to recognize – in this information age – that gathering and disseminating information is a legitimate function of government. It hasn’t been discussed in the census controversy, but it is essential to recognize that during the Great Depression of the Thirties, governments had much less economic data than they have now – in particular, there were no GDP numbers. The economic problem was thus exacerbated because government was flying blind.

The Harper Government believes that what it sees as interventionist social policy can be crippled by depriving it of its informational oxygen. The vast majority of Canadians have now realized that information is indeed oxygen, both for public policy and for their own initiatives, and are resisting.

So where does BK go from here? He could, as a pragmatist, recognize that yet again his ideological agenda won’t sell, and accept the intelligent compromise that the National Statistics Council has developed.

Or he could tough it out. He has the tactical advantages that Parliament is not in session and the deadline for beginning to print the census forms comes next week. When Parliament meets in the fall, he could say that printing has already started and it’s too late to make changes. And he could dare the Opposition to vote no confidence.

Clearly this is an issue on which the opposition parties are united. The question is whether they are ready for an election. For the opposition, particularly the Liberals, the issue would have to be broadened from the status of the long-form census to the role of government in society. And given his background as political theorist, this could be an issue with which Michael Ignatieff would be comfortable.

In any event, it would be two years since the last election, which is a reasonable length of time for a minority government. It’s no secret that the Conservatives have been considering pulling the plug. Indeed they have been polling about it. (I was polled). Why doesn’t the Opposition seize the high ground and define the issue?

I won’t be posting next week. We’re going to see the baseball hall of fame in Cooperstown. I’ll be back the second week of August.

Last week I was reading Walter Keichel’s The Lords of Strategy, a history of strategic management, a field in which both academics and consultants have made important conceptual contributions. Early on, there was a somewhat inside-baseball chapter about the development of the market growth-industry share matrix by the Boston Consulting Group in the late Sixties.

In that discussion I found this sentence: “Finally Lorne Weil, a member of the team, proposed a new display to capture what was going on.” Though Keichel wanted his story to be accurate and complete, one of the rules of writing narrative to avoid referring to a minor character only once, and Lorne Weil was mentioned just this once. If readers paid the name any attention at all, they might have wondered if Lorne was a relative of the famous Sanford Weill.

But when I read that sentence my neurons started firing. I knew a Lorne Weil in high school. I think he was president of students’ council a few years before me. He was an excellent clarinetist and he performed Rhapsody in Blue and Mozart’s Clarinet Concerto with the school orchestra. And I vaguely remember sitting beside him on a flight between Boston and Toronto, probably forty years ago, and he was telling me about his job in management consulting.

I Googled Lorne Weil, confirmed my hunch, and found out lots of other interesting stuff. Yes he started his career in management consulting with BCG. He then moved to the technology sector, focusing on wagering systems and, from 1991 to 2008 was CEO of Scientific Games Corporation (SGMS on the Nasdaq), which describes itself as a supplier of instant lottery tickets and systems, online lottery systems, and pari-mutuel wagering systems and terminals.

Under Lorne’s leadership SGC did very well, increasing its revenues from $43 million to over a billion. Lorne also did very well: the industry publication Casino Journal told us that his total compensation in 2008 was $11 million, of which $ 8 million was in stock.

On the personal side, he lives in New York City and he’s on the Board of Overseers at Columbia Business School, where he took his MBA, and has endowed an “Outrageous Business Plan Competition.” He has a son Luke whose behavior appears to be outrageous, but in a different sense. Luke is discussed in a Jan. 7, 2008 feature article in New York Magazine by Jennifer Senior entitled Rich Kid Syndrome. Luke had a checkered academic career at Brown and Columbia Business School and served jail time for assaulting a girlfriend. Finally, Lorne gave the maximum allowable donation to the 2008 McCain presidential campaign.

What strikes me about Lorne’s narrative is the theme of personal reinvention. Walter Kiechel writes that “One can make a decent living as a senior partner at a major consulting firm – these days, a productive type can earn upward of $ 3 or $ 4 million a year – but as a few of the breed complain privately, it’s no way to become seriously wealthy.” (p. 223). The problem is that consultants advise, but they don’t manage. So Lorne went from being a consultant to the gaming industry to managing a firm in the gaming industry, he was rewarded with equity in the company, and he did become seriously wealthy.

The second reinvention involves crossing a national border. Quite a few ambitious Canadians leave for the Big Apple or elsewhere in the US, like it there, and as Michael Ignatieff – to the detriment of his political career in Canada – did, start to refer to Americans in the first person plural. Others- names like Dan Aykroyd and Frank Gehry come to mind – retain some ties with Canada. It appears that Lorne no longer has any Canadian presence and sees America as his we.

The high school Lorne and I attended, Vaughan Road Collegiate, now Vaughan Road Academy, will be celebrating its eighty-fifth year next spring. (When I attended, Vaughan was one-third Jewish, one-third Italian, one-third working class WASP and it was a great place to learn about what would later be referred to as Toronto’s multi-ethnic reality, but that’s another story.) I’d like to re-encounter Lorne again at the celebration, but I’d be surprised if he makes it.

Yes Minister once referred to the clash between the political will and the administrative won’t, but in the case of retaining the mandatory long-form census, I think it is more appropriate to reverse the terms.

Chief Statistician Munir Sheik’s resignation on a matter of principle is extraordinary and courageous. I heard him speak once or twice and assumed from his soft-spoken manner and mild demeanour that he would continue to accommodate the government. To his credit, I underestimated him.

The most recent instance I could find of a resignation of a Canadian deputy minister on a matter of principle was in 1979, when Deputy Minister of Finance William Hood resigned because the newly-elected Clark Government wanted to institute income tax deductibility for mortgage payments, something his department, as well as most of the economics profession, saw as an unwarranted subsidy. Clark replaced him with an external appointment, Grant Reuber, a former academic economist then a vice-president at BMO.

To confirm my recollection of the event, I found a reference online to a 1989 article entitled “Governments Come and Go, but What of Senior Civil Servants?” written by Jacques Bourgault and Stephane Dion. In this context, the irony is, to use a favourite Stephen Harper adjective, rich.

One difference between the two events is that Hood was parachuted into a job at the IMF. Given the abrupt circumstances of Sheikh’s resignation and the tone of Industry Minister Tony Clement’s response, he appears to have jumped without a parachute. This is even more to his credit.

The bigger issue is what happens when public servants, on moral or professional grounds, disagree with their political masters’ policies. The story of appeasement in the Thirties in the UK provides one answer: stay in place but leak documents, as quite a few civil servants in the Foreign Office did, thereby enabling then renegade Conservative backbencher Winston Churchill to attack the government publicly. Those public servants in StatsCan who have been leaking thus have a heroic figure to emulate.

The papers tell us that Sheikh has been replaced by Wayne Smith, an assistant chief statistician, on an acting basis. Is Smith prepared do the politicians’ bidding and ignore the professional opinion of his colleagues, not to mention his entire stakeholder community?

The Government has the right to appoint the head of StatsCan, and it could search outside the agency to find someone in business or academe to implement the voluntary long-form census. Maybe it will find such a person amongst Prime Minister Harper’s former academic mentors at the University of Calgary. Tom Flanagan perhaps?

Where this story could be going brings to mind a common situation in the United States, discussed in Rosemary O’Leary’s book The Ethics of Dissent: Managing Guerrilla Government. There are a number of agencies, most notably the Environmental Protection Agency and the Department of Labor, whose agendas the Republicans don’t endorse, and indeed that the Republican core would prefer to abolish. Republican presidents have appointed agency heads as well as other political appointees who are at war with their career public servants. The career public servants then begin to operate as guerrillas.

This would be a very unfortunate outcome for a public service that operates on an ethic of professionalism and neutrality. Very unCanadian too, but, unless the Harper Government reverses itself on the census long-form, it may be where we are headed.