Sunday, February 10, 2019

On Deferred Prosecution Agreements

With the uproar over SNC-Lavalin this past week, I decided it would be a worthwhile exercise to familiarize myself with this legal construct that the government introduced with Bill C-74 (2018 Budget Implementation).  Because this is a large chunk of the legislation, I'm not going to do a detailed analysis of its clauses.  Instead, I will refer to a number analyses in various legal journals that are readily available online.

I will endeavour to be objective in the first part, and reserve my personal comments on the matter for afterwards.

What Is A Remediation Agreement (Deferred Prosecution Agreement)?

Dentons provides the following summary of the structure:
One distinctive feature of the Canadian DPA regime is the label attached to it. Specifically, the proposed legislation announces that Canada’s version is based on “Remediation Agreements,” eschewing the conventional “DPA” label adopted by other jurisdictions. However, it is clear from the precise provisions of the legislation that, whatever the label, the framework is fundamentally similar to DPA regimes adopted in other jurisdictions, most notably the UK. 
The core elements are as follows: 
  • Remediation Agreements will be available for a range of economic crime offences, including almost the entire gamut of fraud and domestic bribery offences contained within the Criminal Code, as well as—notably—offences under the Corruption of Foreign Public Officials Act;
  • Only “organizations” (as already defined within the Criminal Code) will be able to take advantage of Remediation Agreements – they will not be available to natural persons;
  • The decision as to whether to offer a Remediation Agreement to a corporate accused will be made by the assigned prosecutor, subject to the Attorney General’s consent;
  • The prosecutor will be required to take certain factors into account when deciding whether to offer a Remediation Agreement, including the following (non-exhaustively):
  • How the impugned conduct was brought to the attention of authorities;
  • Any efforts by the organization to remediate the wrongdoing and address deficiencies in its compliance program;
  • Whether the organization has taken disciplinary action against employees involved in the impugned conduct, and whether it is willing to identify individual wrongdoers to the authorities;
  • The gravity of the conduct, as well as any history of offending by the organization;
  • "Any other factor the prosecution considers relevant,” thereby giving the prosecutor considerable latitude to take account of specific circumstances.
This provides a fairly good summary of what the basic construct is.  It appears, superficially to be designed to create an environment where it becomes beneficial to the corporation to cooperate with a corruption investigation, better enabling access to the perpetrators of whatever acts have come under suspicion, rather than attempting to prosecute the entire corporate entity as a whole.

Dentons' analysis goes further to describe what the agreement must contain, and some of the implications of these agreements.
The proposed legislation also sets out the mandatory terms of any Remediation Agreement, which most notably include (summarily and non-exhaustively): 
  • An agreed statement of facts and an acknowledgment of wrongdoing, to be made publicly available (save in prescribed exceptional circumstances)
  • Obligations to fully cooperate in any investigation relating to the alleged conduct, including by providing testimony to support related prosecutions (such as against individuals)
  • Certifying that information disclosed to Prosecutors in connection with the offence is both complete and accurate;
  • An obligation to forfeit any benefit or proceeds derived from the wrongdoing (or to otherwise deal with such benefits/proceeds as may be directed by the Prosecutor);
  • Payment of a penalty to the Government, as well as an additional victim surcharge of up to 30% of such penalty (except in CFPOA cases, as the CFPOA makes no provision for victim surcharges to be applied);
  • Payment of “reparations” to any “victims” (as defined), or if no such payments are proposed, the reasons why they are not considered appropriate;
Given that the required terms include not only payment of a penalty, but also require forfeiture of any benefit (which could include the entire proceeds from a tainted contract or concession), as well as payment of potential victim reparations or restitution, the potential sum payable for a given DPA is potentially vast. 
While not a mandatory requirement, the legislation also contains a framework for an independent monitor to be appointed to oversee the organization’s compliance and remediation efforts throughout the term of the DPA. This potential requirement is likely to incentivize companies to demonstrate to prosecutors that proactive and comprehensive remediation and compliance enhancements have already been carried out, such that ongoing monitoring is unnecessary. 
As expected, the Canadian regime also provides for a significant oversight role for the court, similar to the UK DPA regime. Specifically, Remediation Agreements will require the approval of a Superior Court, which must be satisfied that the DPA is in the interests of justice and that the terms are reasonable and proportionate to the wrongdoing.
Borden Ladner Gervais' overview of the legislation points out that the decision to initiate such negotiations rests with the prosecution, not with the corporation.
Negotiations for a Remediation Agreement are formally initiated by the prosecution, although we expect that corporations accused will typically invite the initiation of a negotiation as part of a company’s cooperation with an investigation. Prior to commencing a negotiation, the prosecution must determine that there is a reasonable prospect of conviction, that the negotiation is in the public interest and obtain the consent of the Attorney General to the negotiation. The prosecution must also determine that the act or omission did not result in serious bodily harm or death, injury to national defence or security, and was not committed at the direction of organized crime or a terrorist group. The prosecution must also inform victims of the negotiation, including non-Canadian victims (e.g., in the case of a foreign bribery prosecution).

What Is The Justification For This? 

Prosecuting corporations has long been a complex problem.  Even if you can successfully prosecute the company, levying any punishment beyond fines, and possibly imposing some kind of oversight on the activities of the company, is extremely difficult.  

Stephen Aylward, writing for the Globe and Mail, argues as follows:  
These agreements (called “remediation agreements” in the draft legislation) will be available to corporations facing charges of economic crimes such as fraud and bribery. Prosecutors must consider how the misconduct came to light and corrective steps taken by the corporation when deciding whether an agreement is appropriate. The corporation must agree to publicly acknowledge the relevant facts, compensate victims, pay a financial penalty and co-operate in the prosecution of any individual wrongdoers. The bill foresees an important role for the courts in overseeing these agreements (unlike the U.S. model, which leaves greater discretion to prosecutors). 
A conviction may block a firm from bidding on government contracts for 10 years. But the more serious impact may be on a firm’s reputation. Arthur Andersen was one of the “big five” audit firms before it was convicted in 2002 of obstruction of justice for shredding documents relating to its audit of Enron. The conviction was overturned years later by the U.S. Supreme Court but the firm had already collapsed, with more than 100,000 jobs lost. 
These high stakes mean corporations must treat prosecutions as a life or death battle. There is little incentive for corporations to settle or to come forward when they uncover criminal activity internally. Well-funded defendants dig in for drawn out legal battles. Meanwhile, victims wait for years without knowing whether they will be compensated for their losses.
...
Critics complain of special treatment for corporations. Individuals cannot pay their way out of criminal charges and neither should corporations. But corporations are not typical defendants. They are a legal fiction that represents the shared interests of a wide array of stakeholders, most of whom are innocent bystanders. Failing to recognize this can have perverse consequences. BNP Paribas pleaded guilty and paid US$9-billion in fines for evading U.S. trade sanctions in 2014. None of the bank’s executives were charged, although some were demoted and a few were fired. The focus on punishing the corporation left shareholders to shoulder the fine while those responsible walked away. Deferred prosecution agreements require corporations to co-operate in pursuing individual wrongdoers, and so place the focus where it belongs. 

My Thoughts

I am by no means in complete agreement with the legislative construct that has been created here.  My first thought is that critics are well within their rights to criticize it for creating, at the very least, the appearance of an exemption for corporate elites from accountability for their actions.  However that isn't entirely true.  It appears that the intent of this legislation is to make it easier to ferret out the culprits and make it more likely that they can be brought to justice.  The fact that oversight of this process is in the hands of the courts, and not politicians is somewhat reassuring.  That is, in fact, where oversight belongs.  

Prosecuting corporate corruption has long been a difficult conundrum, especially with larger companies.  The larger the entity, the easier it is for corruption to take hold in corners while not necessarily being connected to the overall operations of the company.

In my own experience, corrupt practices can survive a long time in an organization as long as they are "beneficial" to someone a step or two above, but not necessarily be visible to higher levels of the company.  Ferreting this kind of corruption out should be the job of internal company processes, but oftentimes the doctrine of "enlightened self interest" takes hold and a blind eye is turned towards the problematic behaviours, or they are even actively supported.  From the point of view of addressing this kind of corruption, there is some merit to the approach being taken. 

That said, I would like to see the creation of greater direct accountability for the executive and board of directors in these matters.  While in some cases of corruption, it truly is a small group of malfeasants involved, the executive and board have fiduciary responsibilities that should be seen as including the identification and handling of corruption within the organization.  When, as in the situation of SNC-Lavalin, there is evidence of long term corrupt behaviour, the consequences must include those charged with oversight of the company's operations.  However, that may be somewhat outside the purview of this particular legislation.  It is not clear to me how this would play out when senior management and above become implicated in these schemes.  

For those currently trying to make political hay out of this (especially the CPC), it is worth noting that Scheer met with SNC Lavalin's CEO in May, 2018 on this very subject.  While I am not familiar with the nature of any conversation between the PMO and the AG on this subject beyond the broad allegations in the news, I presume that any request to change course was refused on the basis of the state of the case against SNC Lavalin.  If the PMO in fact pressured the AG to change direction, as Scheer and others have asserted, it seems quite likely that Scheer himself would have done the same thing.  

The only thing about this legislation that puzzles me is why it got stuffed into C-74.  It seems to have little to do with the core of the government's budget, and could easily have been a standalone piece of legislation.  I do believe that embedding it in the budget bill has done a significant disservice to the interests of political debate in this country.  

Sunday, February 03, 2019

In Response to Ron Ghitter



In the Saturday, February 2 edition of the Calgary Herald, former Senator and MLA Ron Ghitter published an opinion piece titled “O dysfunctional Canada, laments former senator Ghitter”. This piece is perhaps good rhetoric while being terrible reasoning.

Structurally, Ghitter’s argument is intended to get readers to “buy it” by first appealing to their sense of emotional outrage on a number of topics. He then closes it by essentially arguing for something that strongly reflects René Levesque’s “Sovereignty Association” concept from the 1970s. Essentially he is arguing for Alberta taking “greater control” over affairs while remaining part of Canada. Sovereignty Association failed to become a reality for good reason in the 70s, it’s certainly not a good idea now.

As an example of the “make you mad, show you a proposition”, I present the following from Ghitter’s article:
Meanwhile, Alberta contributes billions of dollars in equalization payments over the years so that Quebec can balance its budget while deficits are the truths in a struggling Alberta.
...
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.
The first part of this argument is a classic argument in Alberta politics, and it is designed to foment outrage. It conveniently ignores several key aspects of equalization and how it works, but it is clearly designed to provoke the reader's ire ("Omigod, how could they be so unfair to us?!"). Then it presents a proposition to "solve" the issue which is similarly ill-informed.

First of all, the opening of the argument makes it sound like Albertans contribute to this program “disproportionately” compared to other Canadians. This is false - Albertans pay federal taxes at exactly the same rates as other Canadians. The argument that we “pay more” is trivially explained by the fact that Alberta’s average incomes are significantly higher than those in other provinces. The argument that equalization “allows Quebec to balance its budget on the back of Alberta taxpayers” is at best a distortion, designed to promote outrage rather than to foster discourse. Alberta also needs to be reminded that Equalization as a program is not a buffer or emergency fund intended to save provinces when their economy tanks (which is always when the issue suddenly becomes a big deal in Alberta)

Other provinces would rightly look at Alberta’s “low tax” regime and rightly point out that their citizens each pay proportionately considerably more in taxes than Albertans do provincially. Our income tax base rate is considerably lower than most provinces, and we do not have a sales tax at all - both of which are levers that the provincial government could, and should, use to balance its budget before making a fuss about equalization going to other provinces. Whether the calculations that determine whether a given province receives payments under this program reflect political and economic realities adequately is a whole other matter.

Ghitter goes on to complain that “Quebec always gets what it wants” (more or less):
It’s a certainty that the demands of the province of Quebec for $300 million for immigrants’ expenses, more control over immigration, income tax collection, more money for Bombardier and support for dairy farmers will be accepted.
...
The premier of Quebec, while gladly accepting Alberta coin, says no pipeline will cross his borders with dirty Alberta oil, while tankers flow down the St. Lawrence Seaway with oil from Venezuela or rerouted from Saudia Arabia, Nigeria or the United States. Meanwhile, rail cars containing oil move on land through Quebec, creating a danger to its communities.
First, I must point out that it isn’t “Alberta coin” that Quebec receives. Again, this is a manipulative statement designed to make it sound like Alberta is directly funding Quebec. These are Federal dollars, collected through federal taxation powers. They are in fact CANADIAN monies, not specifically Albertans’, or Ontairians’ money. We would do ourselves well to remember this little fact.

It is no particular secret that Quebec has always been very successful in advocating for its own interests in confederation. Alberta has long looked at that success with suspicion. Part of Quebec’s success in this regard is a willingness to use the levers it has at its disposal, sometimes ruthlessly. Quebec has never been afraid to change its vote depending on the issues of the day. For all that I may disagree with the stated political objectives of the Bloc Québécois in terms of Québec sovereignty, it is hard to deny their effectiveness in forwarding that province’s interests in Ottawa - even while an “Alberta Prime Minister” (Stephen Harper) was in power.

Perhaps, Mr. Ghitter would like to discuss with Mr. Harper why the current equalization formula ended up being ratified if it was so unfair to Alberta’s interests. I imagine he would find that Mr. Harper would explain to him the political realities of such negotiations.
Under the guise of concern over the environment and First Nations rights, the feds propose legislation that will severely hamper oil and gas development in Canada. They say they support the pipeline but their actions belie such statements. Even their purchase of the pipeline seems to be an insincere (and costly) charade.
With all due respect to Mr. Ghitter, but I wonder just what aspect of the rule of law he would have the current government throw out the window in order to move the TransMountain Expansion project forward? The courts have made clear what needs to be done, and that process is unfolding as it must. It cannot be rushed or hurried, it must not only be comprehensive, but it must be seen to be so. Yes, I know that there are those who rail on about how we “just need to get the thing built”, but the blunt reality is that a narrow consultation process as created in 2012 is inadequate.

I find it most ironic that Mr. Ghitter goes on to rant about “foreign funded opponents” of TMX and other projects. Yes, we all know about Tides Foundation funding, but let’s not ignore the mega dollars that the oil industry (especially via the Koch brothers) has poured into climate change denialism and convincing Alberta in particular to loosen the regulatory restrictions on the industry. I am fairly certain that the Westcoast Environmental Law group will come along and challenge the outcome of the current process in the courts as well. That will also set of another round of bleating from Alberta’s politicians (not entirely without reason). However, such is the nature of our legal system. People have a right to be heard, and to challenge the government in the courts - to subjugate that right for a singular project would be a poor precedent to set in a free country.
I am not suggesting separation. I am too much of a Canadian to ever propose such a measure. But I do suggest that we take steps to take more control within our borders and face the realities of Alberta in the 21st century. 
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.

Secondly, we should take over immigration powers within the province.
 
Thirdly, we should take over our own income tax system and thereby control our own financial destiny.

Fourthly, we should examine every policy intertwined with the federal government and remove ourselves from them wherever possible. This includes everything from French on our corn flakes packages and elsewhere and positioning our securities and stock exchange institutions to become independent of federal controls.

We have learned from bitter experience that we cannot depend on Ottawa to be respectful of our needs and aspirations.
Quite frankly, this looks little different than Lévesque’s conceptualization of “Sovereignty Association” for Québec in the 1970s. To argue that we could “opt out” of equalization is laughably naive. The only way that could happen is if Albertans ceased paying federal taxes at all. If you are going to remain in Canada, federal taxes will remain a reality. I doubt very much Ottawa would be overly interested in providing an “exemption” on those taxes to any province on the basis of a disagreement over how those funds are disbursed within Canada.

To argue that we “should take over our own income tax system” also ignores the reality that it is the politics of Alberta that have stayed the hand of even a “tax-and-spend” NDP government in significantly changing our tax regime. The current system actually saves the Alberta government millions of dollars in administering our income taxes by offloading it to the CRA (a federal agency). For a tax-averse province like Alberta, it seems almost laughable to imagine that taking that back from the CRA would be beneficial.

With all due respect to Mr. Ghitter’s comments about our regulatory framework for investments and securities, he is completely at odds with the rest of the world. Canada is the last of the developed economies to not have its securities and exchange oversight federally regulated. This is actually widely held to be impeding Canada’s economic growth.

Alberta is fully within its powers to change its income taxes, levy a PST, or a Carbon Tax. We are already more than our own masters financially. Ottawa isn’t restricting our ability to balance our budget - our political climate is. Decades of “look how amazing we are” politics that played up the idea that we can “afford” low taxes on the basis of resource revenues had made us temporarily wealthy created the mythology that Alberta doesn't need to raise funds through taxation. It was a short-sighted bit of populist nonsense then, and the price of that short-sightedness is now coming home to roost. 
We are a forgotten appendage in the Canadian mosaic.
I wonder at the apparent speed with which Mr. Ghitter and other Albertans have forgotten the speed with which the Federal Government acted when it became apparent that Kinder Morgan was likely to cancel the TMX project outright.  A truly disinterested government would have quietly let that happen, similarly one opposed to the ongoing business of the oil patch would have acted similarly.  Instead, they bought the damn company in order to keep the project alive.  A more direct "transfer payment" is hard to imagine.

While on the political stage, Alberta is often ignored, we have to take some responsibility for that ourselves.  Alberta gets ignored because we can be predicted.  The odds are that we will vote conservative.  All the parties know this.  The conservatives ignore us because they can; the other parties do because they see no value in trying to sway a province with a decades long habit of voting one way.  This is precisely why Québec's efforts _are_ successful - that province has shown time and again that it will reward efforts made in its direction.  Alberta, not so much.

Mr. Ghitter's column is cleverly written, and will no doubt raise the ire of a good many people.  However, on the whole, it does little more than reiterate the same tired arguments that conservative politicians in this province have been flinging about for some time.  We should all take a step back when reading these types of pieces and ask ourselves "what is the writer's intent?", especially when we see phrasing that is clearly designed to raise our ire through the use of emotionally laden wording. 

Sunday, November 11, 2018

Reasons To Dismantle The Current Party System

I've never been a big fan of the political party system.  Partly because it's rare that party even remotely resembles the kind of perspective in government that I think we need, partly because I believe the party system has become a fundamental problem in our political discourse.  

The current party system has its roots in the UK parliamentary tradition, where (at first) MPs would form natural alliances in the House of Commons.  Eventually that formalized into the current format of parties that exist across time and governments.  

How has this become problematic? 

Friday, October 12, 2018

Let's Stop Conflating Transgender and Toxic Masculinity

I ran across an essay that was trying to argue that somehow transgender activism was "peak male entitlement".


It's quite lengthy, but more or less it boils down to a rehash of a number of classic stereotypes that Trans-Exclusionary Radical Feminists (TERFs) have dreamed up to attack trans women in particular.  

Basically it boils down to the following combination: 

If you are trans, you're supposed to transition and then blend in with society perfectly afterwards. Nobody should ever know that you were ever trans.  

If you have transitioned, and are somehow recognizable as being trans, you're a failure and somehow reflective of "male privilege in women's spaces".  

Lastly, if a trans woman should ever lash out at a critic, well, that too is just male privilege.  After all women aren't supposed to get mad - like ever.  

If you note one thing about all this, you should notice that the entire structure is a double bind meant to silence trans women using many of the same tools and techniques that have historically been used to silence women.  I suppose it comes as little or no real surprise that TERFs would basically weaponize the same tools against trans women.  

Apparently, trans activists are now an objective threat to "real women"(tm), simply for existing.  Making crazy demands like wanting to use bathrooms and suchlike is apparently a danger to all women.  God forbid that any should have an opinion that implies that trans women aren't being treated equitably in our society.  

The author then, somehow, tries to twist this into being a form of violence against women.  As if a woman is metaphorically being assaulted simply by being in the same room as someone with a penis (and goodness knows, a trans woman who hasn't had surgery is just a sex crime looking for a place to happen, right?).  No - it doesn't really work that way.  

What the author of this piece is missing is this little fact:  the very existence of transsexuals - both MtF and FtM - calls into question the rigid delineation of "has penis = man, has vagina = woman".  The reality is that "man" and "woman" need to be understood primarily in the context of the social, not the biological.  The biological informs the social to a point, but there are always outliers and that is what trans people are - the outliers. It's only been relatively recently that there has been enough of a body of trans people that the logical problems with the old assumptions have become inescapable.  

There is a light being shone on one of our society's oldest assumptions right now, and it is the trans community that is pointing out the problems.  I get it - the idea of a girl with a penis is unsettling to some - especially in the lesbian community.  But guess what?  It isn't unsettling to all in that community either - there are some lesbians who are perfectly happy with a transgender partner.  

Having a penis doesn't make someone dangerous to women. We really need to drop this entire line of reasoning - it's stupid. So, instead of trying to characterize trans women as somehow "doing violence" to women, how about we recognize that violence against women (trans and not) happens, and as a society we need to do something about it?

Thursday, September 06, 2018

No, 2008 Wasn't A Failure Of Socialism

In the Financial Post today, we have Terence Corcoran yammering on trying to claim that the 2008 Subprime Mortgage Crisis was the result of the evils of "socialism".
That the collapse of Lehman Brothers was the final explosive device that rocked the world financial system is beyond dispute. But why and how Lehman Brothers was allowed to fail is another story told with new insight in the latest book, The Fed and Lehman Brothers: Setting the Record Straight on a Financial Disaster, by Johns Hopkins University economist Laurence Ball. In Ball’s view, Lehman did not have to fail and was instead executed by agencies of the U.S. government.
While intervention by US regulatory authorities was no doubt the key moment when the entire house of cards that had built up around the 'housing bubble' began to collapse.  Any rational person who had looked at the kind of loan terms that were being offered under the rubric of "subprime mortgage" could see how predatory they really were. There was no expectation that these loans would be paid back, and banks were expecting to repossess the property itself in lieu of payment - making their money on the ever escalating property values.  The emergence of so-called "NINJA Loans" (No Income, No Job or Assets) which were solely predicated on the idea that unpaid loan amount would be recouped via the escalating property value is pretty much prima facie proof that the banks making such loans had shed any semblance of ethical business practices for naked greed.
Massive national institutional resources — government and private — were ultimately corralled and coerced into government-mandated programs that were ultimately designed to provide mortgages to people who had no money to make down payments and insufficient income to carry a mortgage. Between 1995 and 2007, trillions of dollars flowed into housing people could not afford.
The error in Corcoran's logic here is that he supposes the entire failure is a result of government regulation intervening in the market.  I disagree.  First, Mr. Corcoran misunderstands the idea of socialism, confusing it with regulation.  While I realize that many in the more "libertarian" wings of the political right believe that the "invisible hand" will correct the excesses that unregulated markets a prone to, the objective evidence is far clearer: without regulation, unregulated markets inevitably collapse to the detriment of all.  Whether that is the Stock Market Crash of 1929, the Enron Collapse, or the Subprime Mortgage Crisis, all of them point to situations where weaknesses in the markets were being exploited for greater gain by the most avaricious.

Where the US government erred was in failing to have in place an appropriate regulatory regime for the housing market in the first place.  A lack of clear standards on who qualified for a mortgage, what the criteria for mortgage terms would be, and a host of other factors created an environment where it became possible to turn what used to be a "second mortgage" or a "line of credit" secured against a home suddenly being structured into what would become a "subprime" mortgage.  At the time, the ethos in the US government was very much "don't intervene in the markets".  Canada's comparatively successful weathering of the 2008 recession is clear evidence that appropriate regulation of the markets is in fact an important aspect of ensuring that our own financial institutions weathered the storm.  By the time the US government intervened in an overheated housing market, they were trying to stop the bleeding, rather than cure the problem - free market fundamentalists in Congress would have screamed blue murder had the government taken the correct actions of intervening in the market before a "natural correction" collapsed everything.
The crisis of 2008 was not a product of capitalism or markets or the inherent greed of bankers. It grew out of populist political posturing and manipulation of the market economy to attain social objectives. It was a colossal failure of socialism for the poor.
In his conclusions, Mr. Corcoran returns to what appears to be an almost libertarian perspective.  More or less, "if you aren't among the hallowed wealthy, screw you".  To be honest, the analysis in Mr. Corcoran's article is so flimsy and devoid of context, that it leaves one wondering why he wrote it.  The assumptions he makes are so transparently libertarian in their tone that I wonder if he is positioning himself to become a cheerleader for Maxime Bernier.
 

Monday, September 03, 2018

Conservatives in the Social Sciences

This was inspired by some of my own thoughts while listening to a CBC Ideas program on the lack of "conservative" academics in the Social Sciences.  For the purposes of this discussion, I am going to stick to the broader, "small-c" conservative, "small-l" liberal concepts rather than the very specific partisan conceptualizations that dominate political discourse these days.

The general gist of the article was that a lack of "conservative" voices is detrimental to the general form of discourse in the domain of the Social Sciences. My first thought on this is that proper discourse is not about coming at it from a "conservative", "liberal" or "libertarian" perspective but rather from a perspective of critical analysis.

For example, one doesn't have to approach Littman's paper from any particular perspective to identify the methodological problems that exist in that paper.  A little bit of critical analysis identifies a number of flaws which more than call into question the validity of the conclusions derived from it.

The problem that many "conservative" thinkers face is twofold.  First, within the disciplines generally held under the label of "Social Sciences", the body of evidence tends fly in the face of a lot of conservative thought. As that body of evidence started to flourish in the 1980s, it became increasingly difficult for many traditionally conservative lines of reasoning to be sustainable. For example, analysis of the systems which exist around poverty has been shown to sustain the state of poverty in multiple ways, quite effectively dismantling the often-held "you just aren't working hard enough" argument.

A second dimension is that many conservatives argue that they don't like constructs such as social justice or intersectionality. However, besides objecting to these frameworks on general principles, we don't see anyone actually providing reasons that these frameworks are invalid. Uncomfortable, or difficult for various reasons, but beyond expressing their dislike for the construct, conservatives haven't presented a meaningful alternative or evidence that supports their contention that it's invalid.

There seems to be a mentality among conservatives that everything is "open for debate" (or should be), and yet instead of identifying new and meaningful, they merely complain about "emerging orthodoxy" (ignoring that over time, science itself tends form "orthodoxy" in the form of dominant theories and known facts. Moaning about the emergence of dominant approaches in a discipline is just showing that the discipline is maturing. We don't question fundamentals in science like the heliocentric solar system ... because they work and there is no compelling evidence which contradicts them.

What isn't helpful for conservatives is the fact that people who have adopted the conservative banner have become people like Jordan Peterson.  People like him create an enormous problem for conservative thinkers because much of the time the positions they put forth are mostly nonsense and trivially disproven (e.g.  Peterson's theory on social hierarchies).  The second problem is that these same people attract neo-nazis and other people who manipulate those positions to justify their own awful (and destructive) beliefs.

For conservative thinkers in the Social Sciences domains, the challenge is to develop some evidence-based constructs to support their positions.  Show your peers why the constructs being used are flawed, and provide alternatives.  That's a long road at this point. Being conservative shouldn't mean being what my grandmother used to call a "stick in the mud" about things - it should be thoughtful and intelligent.

Saturday, September 01, 2018

Whither NAFTA Negotiations Now?

After yesterday's revelation that Trump is not negotiating with Canada in good faith, where do NAFTA negotiations go from here?

Up to this point, I have chosen to be quiet about the NAFTA negotiations because I really don't believe they will go anywhere.  If an agreement is reached, Trump's track record in business strongly suggests it won't be honoured; and far more likely is that Trump will sabotage any negotiations to suit his own ends.

I will start off by saying that I think Trudeau and Freeland have done an excellent job of managing what amounts to a no-win situation. Trump has engaged in a lot of goading, attempting to get an emotional response out of Trudeau only to find that met with nothing.  This isn't a bad thing.  It speaks to Trudeau being more than capable of recognizing what Trump is doing, and not dignifying it with a response. Give a guy like Trump the emotional response he's looking for (anger, impulsive "hitting back", etc.), and he sees "a win" - a situation where he can manipulate more because he's got the other party reacting emotionally to his provocations.

Reaching back to my experiences in grade school, the first comment I have is that you never give a bully what they want - EVER.  In this regard, Canada's government has (so far) done the most appropriate things it can.

Right now, the NAFTA talks have turned into a game of "chicken".  Trump is hoping that Canada will blink and sign whatever this deal with Mexico is before Mexico's government changes over in September.  Canada continues to approach this as normal negotiations.  This isn't a bad thing at all, as it both moves Canada's interests forward, while not granting Trump the emotional reaction he's looking for.

From Canada's point of view, if NAFTA is going to die, forcing Trump to kill it is advantageous.  If Canada walks away, then Trump (and Canada's conservatives) will be able to blame the Trudeau government for not "being able to negotiate".  If Canada persists (and we're good at that) in negotiating until Trump loses patience and kills the talks off, then Trudeau can legitimately say "we did all we could, and the other side wasn't willing to play ball".

There are a couple of angles on this discussion that I think need further consideration.  First is the sudden rush with Mexico. From the G&M article above (possibly behind a paywall):
Cesar Rojas, global economist, Citigroup: 
“The current Mexican administration remains hopeful that Canada will join the agreement, but some officials have stated that Mexico would move forward with a bilateral deal if Canada does not join. We note, however, that the incoming Mexican administration highlighted that Canada is key for the NAFTA renegotiation … If the final negotiations extend further and the agreement is to be signed by the incoming Mexican administration, then there is a risk that an agreement is delayed as the new Mexican negotiation team (which has been an observer over the last few weeks) could review other issues.”
This is important.  The current Mexican government is on its way out after an election in June.  From Canada's point of view, this points to potential weaknesses in the deal that a new administration in Mexico may not be willing to support.  Things could get very sticky if the Mexican government suddenly becomes unwilling to ratify the proposed bilateral agreement.  The current Mexican government may well have negotiated an agreement for future political advantage for their allies rather than the nation's interests. (Note:  this is entirely speculative, as I have little to no familiarity with the currents of Mexican politics)
David Rosenberg, chief economist at Gluskin Sheff + Associates: 
“My hope is that Canada does not cave in to a bully with a gun against our head (the threat of 25-per-cent auto tariffs) and realizes that nothing is going to get approved in Congress without the ‘true north strong and free’ being involved. This seems to be an area where the legislative branch is starting to show some backbone, at least verbally, and I do sense that the president has underestimated where most of Congress stands on this issue of Canada being excluded from any agreement.”
JPMorgan Chase analysts: 
“The U.S. Congress could be a major hurdle, as it could disapprove of the administration trying to shoehorn a separate bilateral deal using the existing Trade Promotion (aka ‘fast track’) Authority initiated in May 2017 covering the tripartite NAFTA inclusive of Canada. In the event the bilateral U.S.-Mexico agreement cannot be fast-tracked, the White House would need to restart the trade negotiation notification and consultation process for bilateral deal(s). Such a process would require new Congressional TPA notification and consultation and would almost certainly extend the potential timeline by 10 months or more, and beyond the Nov. 30 agreement signing window U.S. and Mexican negotiators are trying to achieve.”
These two analyst comments point out that Congress may well be less than willing to roll over on a trade deal for Trump.  Now, that has to be contrasted with the fact that the current US Congress has been seemingly far too willing to be compliant with Trump's demands.  Only time will tell. Trump and his advisors have been remarkably adept at exploiting gaps in the constraints in place to check on the abuse of executive power. Whether they have enough leverage to convince Congress (a majority of whom are from states who will be adversely affected by a "NAFTA 2" that doesn't include Canada) to vote against their own state level interests is unknown.

So far, most of Trump's abuses of power have not affected state level economies and powers. American politics often protects the powers and interests of local states rather jealously.  The levers Trump has been using to this point may not be adequate for this fight.

For its part, Canada will be best served by staying the course. The irony of Trump's recent statements is that they confirm what we have suspected for some time:  namely that Trump has not been negotiating in good faith. Now it is out there for all the world to see.  Trudeau is not being "weak" if he lets NAFTA 2 fail - he is, in fact acting in Canada's interests. A NAFTA which is hostile to Canada's interests is hegemony, not an agreement.