August 21, 2007


MMP: meaningless reform...

MMP is an illusion of reform. New Zealanders want another referendum to get themselves out of the mess they now find themselves in. There is a non-partisan campaign in Ontario against MMP with many Liberals and Tories involved. You can find more information about it on the following web site:


Is MMP really any better?

From: The Economist print edition

Worthy but dull
Aug. 30th 2007 - OTTAWA

CANADIAN politics is a four-party affair, with a fifth party, the Greens, now trying to break into the club. Yet the country clings to a British-style first-past-the-post electoral system. Inevitably, that produces some big unfairnesses—especially in Ontario, the most populous province. At the last provincial election in 2003, the Liberals won 46.5% of the vote but 70% of the seats.

Such discrepancies have prompted some Canadians to champion proportional representation. On October 10th Ontario will hold a referendum on the issue in conjunction with a provincial election. If it passes, it could soon be matched at federal level.

The referendum was the main outcome of an independent citizens' assembly on electoral reform set up by the provincial government last year. This endorsed a mixed-member proportional system (MMP), similar to that in Germany, comprising 90 constituency members, with 39 more drawn from party lists according to their province-wide vote.

This is impeccably fair but seems to leave Ontarians cold. Neither the provincial government nor the opposition has taken a position on the issue. A "Vote for MMP" campaign has set up an office in Toronto and claims a dozen chapters in the province; its opponents have managed to raise just C$500 ($470) to print a leaflet. Both are relying on a C$6-7m educational campaign by the election agency.

Proponents of change may have the edge, but they face a stiff hurdle: they must win a majority in 60% of constituencies as well as the votes of 60% of all those who turn out. That narrowly scuppered an attempt to introduce proportional representation in British Columbia in 2005.

Supporters say MMP is the cure for public alienation from politics. Opponents point out that each of Ontario's three main parties has had a spell in power in the past 15 years. They also say that MMP would produce unstable minority governments.

Yet Canadians seem in no hurry for a new election to eject their federal minority Conservative government. In March, Quebec elected its first minority provincial government since 1878. Ontario's election may also see the Liberals returned as a minority. This trend might strengthen the case for proportional representation - but only if the voters shake off their summer-holiday languor.

Copyright 2007 - The Economist


Thank god for Thatcher!

Have you seen this series yet?

Tory! Tory! Tory! - In the 1970s, Britain was a country being ravaged by discredited and failed socialist policies and strangled by gross abuses of trade union power. These documentaries chart the painful but vital changes that the Conservatives implemented which saved the country economically and rescued it politically from the grip of socialist idealogues. The medicine was bitter and many people faced serious hardship, but the cost of not making these changes would have been unimaginable deprivation and decline. The ideas of Seldon, Hayek and the US ideas of monetarism, implemented by the Thatcher government, brought the country back from the brink of collapse and despair - to the point where, with a population of just 60 million and relatively poor natural resources, it now has the sixth biggest economy in the world.

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More on the Arctic...

From: The Wall Street Journal

Northern Rights

August 13, 2007

When Russia planted its flag on the Arctic Ocean floor a fortnight ago the world was treated to a spectacular bit of retro-theater, circa 1957. It is as if we were reliving the days of Sputnik. Only this time the Kremlin was officially notifying the world that it intends to dominate the Arctic and control the vast natural resources that it contains.

Of course, if Russia plans to abide by the Law of the Sea Convention, which it has signed, the flag, four kilometers beneath the sea, brings it no closer to owning the treasures buried there. "Jurisdiction over resources is not determined by staking claims," says John Norton Moore, an international law scholar at the University of Virginia. That will be decided by the "commission on the limits of the continental shelf," established under the convention.

On the other hand, if Russia thinks it can bully its way into the Arctic while it stirs up nationalism back home, planting the flag makes perfect sense.

Canadian Prime Minister Stephen Harper is one Russian neighbor who doesn't seem to be betting on Kremlin honor. His government dismissed the Russian action as a stunt, but last week the prime minister embarked on his own Arctic adventure. He went on a three-day trip to the region and announced Canadian plans to build a deep-water military port there, and a new Canadian Forces winter-fighting school.

Mr. Harper's defense initiatives in the Arctic are animated at least in part by a vastly different world view than that of his recent predecessors in Ottawa. He ran for office promising a stronger military and he has been a staunch defender of Canada's Afghanistan mission. Last month he announced the purchase of six Canadian-made Arctic patrol ships at a cost of more than $6.6 billion. Under his leadership, Canada seems finally to be waking up to the geopolitical risks it has invited by gutting its defense forces and massively shrinking its international relevance over recent decades.

The U.S. has not signed the Law of the Sea Convention, but our NATO allies have, and the commission has already rejected, for lack of evidence, a 2001 Russian claim that the Lomonosov Ridge beneath the Arctic Ocean is an extension of Eurasia. Now the Russians seem to be asking, who is going to stop us? While Mr. Harper's attempts to reclaim a Canadian military presence are important, they are unlikely to be enough to defend the North from the Russian bear. To do that, it will need the U.S., which was even more dismissive of the flag escapade than Canada. State Department spokesman Tom Casey said, "I'm not sure whether they've put a metal flag, a rubber flag or a bed sheet on the ocean floor. Either way, it doesn't have any legal standing or effect on this claim."

American and European solidarity with Canada against Russian expansionism in the Arctic will be crucial. But Canada's case would be stronger if it weren't simultaneously making its own unsubstantiated claim of sovereignty over the Northwest Passage, a claim recognized by neither the U.S. nor the European Union.

The U.S. does not challenge Canada's sovereignty over its Arctic lands, and the Law of the Sea allows states to adopt limited environmental protections in ice-covered areas. But the U.S. and EU do maintain that the passage is an international strait and not the internal waters of Canada.

As detailed on the nearby map, the Northwest Passage connects two "high seas," a key geographic test for defining an international strait. A second test, known as "usage," is not recognized by the convention but even it seems to have already been met by submarine traffic. The bottom line is that any attempt to impede transit through the passage's deep water channels - which offer a path some 7,000 kilometers shorter than the Panama Canal journey from east to west - goes against established maritime law.

For the U.S., this is no small matter. As U.S. Navy Commander James Kraska explains in a recent issue of the International Journal of Marine and Coastal Law, "maintaining a stable regime that ensures global maritime maneuverability and mobility is considered a cornerstone of the nation's economic and national security."

It is very clear that if there is a territorial predator it is Russia and not the U.S., and it is also clear that Canada needs help securing the Arctic. That means that it is in Ottawa's best interest to work out the passage dispute. But that won't be easy. There may be nothing that so symbolizes Canadian identity as the rugged Arctic - even though an overwhelming majority of Canadians live within 200 miles of the U.S. border.

Unfortunately, despite the sentimentality about the North, Canada has shown little interest in the region. In a 2004 paper on the Northwest Passage dispute for the War Studies Program at the Royal Military College of Canada, doctoral candidate Andrea Charron noted that "Canada has not made securing a presence in the Arctic a priority," because it has "always known it can rely on the U.S." and because "establishing a significant presence in the North is extremely expensive."

Now that Russia is acting up, Canada will have to rethink its priorities. One option, Ms. Charron wrote three years ago in anticipation of growing international interest in the region, would be "Canadian control of the passage as a way of securing the North American perimeter," while "accepting the compromise that comes with relying on our neighbors for security (as was done in the Cold War.)" Given the way Russia is behaving these days, the need for Canadian flexibility may be greater than anyone realizes.

Write to: O'

Copyright 2007 - The Wall Street Journal


The Arctic is becoming an issue...

From: The Washington Post

Russia's Deep-Sea Flag
Planting at North Pole Strikes a Chill in Canada
By: Doug Struck - Washington Post Foreign Service
Tuesday, August 7, 2007; Page A08

TORONTO, Aug. 6 - A dramatic submarine dive to plant the Russian flag on the seabed at the North Pole last week has rattled Canadian politics and underscored the growing stakes as the ice cap melts in the oil-rich Arctic.

Canada and the United States scoffed at the legal significance of the dive by a Russian mini-sub to set the flag on the seabed Thursday. "This isn't the 15th century. You can't go around the world and just plant flags" to claim territory, Canada's minister of foreign affairs, Peter MacKay, told reporters.

But the government here has been thrown on the defensive by the Russian action, accused by critics of doing too little to meet a deadline for the five Arctic nations to map and claim huge areas of the Arctic seabed.

A U.S. Coast Guard icebreaker left Seattle on Monday for an area 500 miles north of Barrow, Alaska, where a contingent of 20 scientists are to continue compiling an undersea map in preparation for a U.S. claim of the resources there.

Canada has not equipped itself to do the same. It has no icebreakers heavy enough to tackle the Arctic ice head-on.

In the view of opposition leader Jack Layton, head of the New Democratic Party, the government has responded with little more than rhetoric to threats to Canadian sovereignty in its frozen backyard. "Canada must move quickly and make immediate, strategic investments in its Arctic," Layton said Sunday.

The 1982 U.N. Convention on the Law of the Sea gives each of the five Arctic nations - Canada, the United States, Russia, Denmark and Norway - 10 years after their ratification of the treaty to map out the Arctic seabed.

The maps, along with sediment samples and other scientific information, can be used to claim parts of the seabed that are extensions of the continental shelf of each nation. The claim would apply to the buried resources, not to the water above.

For years, progress under the international treaty was slow. The United States has not ratified the convention, though observers expect that to happen soon under the Democratic-controlled Congress. Global warming has added a sudden urgency to the process by thinning the Arctic ice cap, making drilling and shipping more feasible.

The potential rewards are great. The U.S. Geological Survey estimates that 25 percent of the world's undiscovered oil and gas lies in the Arctic.

"The huge irony is that we are only talking about this because humanity has burned so much oil and gas that the ice is melting," said Michael Byers, an international law expert at the University of British Columbia in Vancouver. "It could be a vicious cycle: Climate change is opening up the Arctic to oil and gas drilling, which almost certainly will cause more climate change."

Russia, the first of the Arctic nations to ratify the treaty, has undertaken extensive mapping using its huge nuclear-powered icebreakers. Norway and Denmark have also conducted undersea mapping. Canada, which ratified the treaty in 2003, is cooperating with Denmark on the ice northeast of Ellesmere Island, setting off explosives to seismically map the ground under the Lincoln Sea region of the Arctic Ocean.

The United States has been mapping the Chukchi Cap area since 2003, according to Larry Mayer, director of the Center for Coastal and Ocean Mapping at the University of New Hampshire. That area is not expected to conflict with Russian claims, he said.

Mayer, who will join the icebreaker USCGC Healy as chief scientist, said the U.S. mapping effort will be greatly aided by sonar mapping done by U.S. Navy nuclear submarines that routinely cruised under the Arctic cap during the Cold War. That classified information has gradually been made public for scientists' use, Mayer said.

Canada historically has considered much of the North American side of the frozen Arctic its territory and bristles at U.S. claims that the thawing Northwest Passage through that area is an international strait. Prime Minister Stephen Harper, who is to tour Arctic communities this week, has called the Arctic "central to our identity as a northern nation."

But Canada has no northern deep-sea port and no submarines capable of traveling under the Arctic cap; its aging icebreakers were built for work on the Arctic's edges and in the St. Lawrence Seaway. It has a minimal military presence in the north and counts on the traditional presence of the native Inuit people to bolster its claims to the thousands of scattered islands that make up the Canadian archipelago.

Layton said Canada's larger problem is its failure to try to stop the warming that is opening up the Arctic. "Climate change policy is northern policy, and we have no time to waste," he said.

Staff researcher Natalia Alexandrova contributed to this report.

Copyright 2007 - The Washington Post


Celebrate Freedom...

From: The Wall Street Journal

Friedman's Legacy

July 31, 2007

Today, in cities across America, events are being held to celebrate the ideas, vision and influence of the late, great economist and Nobel prize-winner Milton Friedman. This would have been his 95th birthday.

The occasion gives us a chance to look back on many of the questions Friedman contemplated during the course of his productive career. In particular, why do people in some countries prosper, while those in other countries live in poverty? Is it luck? Is it something that their governments do? Or perhaps it's something that their governments don't do?

Friedman knew that the answers depended on the extent to which governments supported personal freedom, political freedom and economic freedom. And thanks to his advocacy, many countries around the world have come to see the connection between freedom and prosperity.

Friedman's views on freedom could be summed up by the aphorism, "There's no such thing as a free lunch" - a saying which he popularized, but did not invent. Friedman knew that nothing in life is truly free, but he argued vigorously that free markets and private property rights are as close to a "free lunch" as we might get in the real economic world.

As he saw it, some countries prosper while others flounder and stagnate because the successful ones have economies of largely free and open markets. This kind of "free lunch" is guaranteed by institutions that promote and respect personal, political and economic freedoms.

Friedman advanced his views on freedom through bold ideas on a wide range of public policy issues: economic growth, school choice, taxes and the role of government, an all-volunteer military, exchange rates, money and inflation, trade and globalization, just to name a few. Through these disparate issues, he revived the economics of liberty by consistently advocating the virtues of freedom and opportunity.

Friedman reminded us of the economic principles first outlined by Adam Smith. Take Smith's concept of the "invisible hand," by which individuals, who may intend to pursue only their own interests, ultimately promote the public welfare. In other words, a society composed of individuals acting in their own interests creates a freer, more stable and prosperous economy than one planned by the state.

Friedman's ideas also derived from those of Thomas Jefferson - in particular, his principle that every person is free to pursue his own life in accordance with his own values. Put another way, people should be allowed to make their own choices because they know what's better for themselves than any outsider can know.

Thanks to his unwavering support for free enterprise and open markets, Friedman's ideas have elevated standards of living for a rising share of the world's population. More and more people are free to choose their path in the economy, acting in their own self-interest by engaging in mutually beneficial exchange under the rule of law. More and more central banks have followed Friedman's advice and taken control of money growth; indeed, inflation has fallen around the world in developed economies, emerging markets and even among most less-developed nations. And more and more nations are engaged in trade with each other, seeing new markets as a source of greater opportunities and additional resources.

Friedman taught that economic growth comes from innovation and entrepreneurship, by individuals whose minds are open to ideas and by firms engaged in competitive markets open to trade. Friedman saw cooperation in this competition. He saw opportunity in free markets and globalization. And he saw education and the free exchange of ideas as prerequisites to advancing this freedom for the next generation.

Indeed, Friedman once said, "Freedom is not the natural state of mankind. It is a rare and wonderful achievement. It will take an understanding of what freedom is, of where the dangers to freedom come from. It will take the courage to act on that understanding if we are not only to preserve the freedoms that we have, but to realize the full potential of a truly free society."

So as we celebrate Milton Friedman's birthday and achievements, we must continue his legacy and keep making the case for freedom.

Mr. Siems is a senior economist and policy advisor at the Federal Reserve Bank of Dallas.

Copyright 2007 - The Wall Street Journal

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