Offensive?

Juha Saarinen's pointing to an old Australian censor's compilation of naughty words reminded me to check up on whether New Zealand's Broadcast Standards Authority has updated its list.

Long-term readers will remember the BSA surveys of a decade ago looking at the offensiveness of different terms. I'd then written:

New Zealand's broadcast standards authority stops stations from using naughty words before 8:30 at night or so. But how can you tell what's acceptable? 'Bugger' used to be terribly naughty; now, not so much.

Turns out they run a survey.

And, before last year, the survey was run face to face. Now it's online.

David Farrar feels sorry for the poor folks who had to go door to door with their list of swear words, asking the folks answering the door how offensive they found each one.

Maybe there's too much of the Eric Cartman in me, but get me on the right day, I might even pay money to do the polling work. Avoiding cracking up half-way down the list, and avoiding adding new ones to the list, would be the hardest part.

Now imagining Cartman actually being hired to do the survey and interviewing Mrs. Broflovsky...

And a few months later I noticed the time trend showing declining offense-taking. Some of that's now suffered link-rot.

But there have been updates since then anyway.

This 2013 fact sheet, "Unacceptable words on Television and Radio: A comparison of words that respondents found totally or fairly unacceptable in 2013, 2009, 2005 and 1999" has a great time series. Most things become less offensive over time, or at least for things at the top end of the distribution of offensiveness.

The 2018 update continues to show drops in the offensiveness of the most offensive terms - I've cut the column giving the specific words, but you can check it out for yourself if keen.

They also note "small but notable increases in proportion who find some gender-related words totally unacceptable", and that the "level of unacceptability for some blasphemies has decreased significantly."

The full report goes through offensiveness of different terms in different contexts, like whether the term is used by a talkback host or by a caller; as part of a show on television early in the evening or later. 

It also finds NZ Europeans are most accepting of swear words, followed by Maori, followed by those of Asian background, followed by those of Pasifika backgrounds. Females, Christians, and those on lower incomes are also less accepting of swear words - although this isn't a multivariate analysis as best I can tell, just cross-tabs. 

I love that the Broadcast Standards Authority runs these polls rather than asking a committee of expert prudes about community standards. It's all a bit moot with folks shifting to streaming from broadcast, but I still like it. 

And I still imagine Eric Cartman running the survey, and using it to get away with uttering the vilest phrases imaginable with an innocent look on his face, utterly free from consequence. 

Gemmell's foil

Norm Gemmell takes my piece over at the Spinoff on the Tax Working Group's recommendations as foil in his Public Finance Chair update at Vic Uni.

It's a bit weird. I agree with what Norm says, and don't think it disagrees with what I'd said at the Spinoff, but it's presented as though there are differences of opinion.

I suppose I'll start at the start, where there's potentially the biggest disagreement. 

Norm writes:

The Spinoff brought together a number of interested parties, including the economics blogger at the New Zealand Initiative, Eric Crampton.

Interestingly, Eric reports that his US experience backs up claims that a CGT which exempts the family home, encourages families to ‘divorce’ for tax purposes (so more than one ‘home’ becomes CGT-free). Here is Eric’s comment: “If you’re laughing, note that family friends back in the United States would divorce and remarry semi-regularly for tax purposes. They’d have a small party each time they did. Good luck to IRD in policing that.” Of course, the US allows married couples to choose between separate or joint taxation, which New Zealand does not. Do we really believe that this will be a substantive tax avoidance trick used with a New Zealand CGT? Unlikely I suspect, but perhaps the Family Court should be getting prepared!

I noted the American anecdote mostly to allay the scepticism of marriage-fundamentalists who can't imagine that anyone would respond to incentives in that regard. I've had others tell me, since my piece at the Spinoff, about their own stories of marrying or divorcing for tax reasons.

Norm seems sceptical here because Americans can already choose to file separately rather than jointly.

I never understood the ins and outs of the couple in the anecdote: they were the parents of friends of my wife's; the divorcing and remarrying was rather some time ago now.

But I know that the 2018 tax changes in the US worked to close a loophole where alimony payments were deductible in ways generating a substantial tax break for divorcing couples in particular circumstances.

Under the current system, people paying alimony can deduct those payments — no matter how big the amount — from their income before calculating what they owe in taxes. That deduction provides a significant benefit to the wealthiest Americans, whose top tax rate is 37 percent and who would otherwise owe taxes on all of their income, including what they paid out in alimony. Right now, the rich disproportionately deduct alimony — about 20 percent of taxpayers who currently claim the deduction are in the top 5 percent of household income earners.

If you file separately, the high earning spouse's income is taxed at the top rate. If you divorce, you can punt a pile of the high earner's income into a much lower bracket. Or at least you could in 2018.

Here's Forbes offering 4 reasons to finalize your divorce in 2018 to save money. 

Here's CBS noting couples rushing to divorce to save on taxes. And another. And another.

Bottom line: if the tax system provides strong incentives to do something, you might expect at least some of that thing to happen. With the CGT as proposed by TWG, there will be some couples who will choose to present as not-partnered because being in a civil union or marriage would mean that their second property would become subject to CGT; there will be some who divorce, on paper, to achieve the same end.*

I've no clue how many people will do that. We have only one house so no incentive to. But there is a whole enforcement apparatus around the benefit system checking into whether someone on benefit actually is enjoying support from their child's other parent; it would be odd to think that there won't be enforcement requirements at the top end of the distribution too if the state creates tax incentives for paper divorces.

On to environmental taxes, where I don't think we're disagreeing at all. Norm doesn't like the burden shouldered by 'if they're done well'.

Another TWG’s key recommendation is to shift towards environmental taxation.  Eric Crampton’s Spinoff piece reflects a commonly held economic view: “In principle, this has a lot of merit. Taxes that correct underlying distortions provide a double dividend. Not only do they raise revenue, but they also improve overall economic efficiency if they’re done well.” Of course, it can be hard to avoid the tautology here that ‘if they are done well’ they will be efficient; and ‘if they are efficient this must indicate they are done well’!

But, as with a CGT proposal that ignores the income tax and transfer system, a new ‘environmental approach’ to taxation that ignores the rationales for the current system risks the same incoherence. On climate change, for example, we already have an Emissions Trading Scheme designed to take greater account of the social costs of atmospheric emissions. So, whether and how a separate tax on carbon emissions, or a broader set of environmental taxes (such as on energy generation) should be pursued, needs much more careful thought than the TWG could possibly give it.

I completely agree with Norm's argument against imposing a carbon tax on top of the ETS, or other taxes on things already covered via the ETS.

Here's what I wrote.

The group recommended strengthening the Emissions Trading Scheme and having it shift, in effect, to being more like a tax by having the government sell more of the permits over the longer term. That recommendation should be supported if implemented well.

That isn't layering other carbon charges on top of the ETS. It's instead anticipating that eventually the government will be selling credits into the system rather than gifting them to incumbents during this initial phase. When that happens, the revenues from credit sales we can view as comparable to an environmental tax in the overall Crown revenue mix.

There's still heavy lifting in the "if implemented well." But this is hardly the same thing as layering a carbon tax on top of the ETS. And I would absolutely oppose layering other carbon charges on energy and the like - a well-functioning ETS means you don't need any of that sector-specific nonsense in energy or elsewhere.

I thought I'd made that pretty clear in the very next paragraphs, where I remind that stuff like tax breaks for buildings constructed to higher environmental standards are a poor idea:

So too should its recommendation to use congestion charging to help fund the roads – it makes a lot more sense, and is far more equitable, than measures like the Auckland petrol levy that fall very heavily on poorer families with less fuel-efficient cars.

The group also recommended using taxes to improve water quality if the government isn’t able to find better ways of dealing with the problem soon. It suggested water taxes and taxes on fertiliser as potential measures.

Making sure that water users face the cost of that use is important, but tax is a blunt instrument. A tonne of nitrogen fertiliser has very different effects depending on where it’s used. And water taxes have a hard time recognising regional differences in water scarcity. Water should surely be more expensive in Canterbury than on the West Coast, but the government would have a hard time finding the right prices. A cap-and-trade system like the Emissions Trading Scheme is more appropriate.

Other suggestions, like hunting for reasons to justify increasing existing waste levies, or giving tax preference to buildings constructed to tighter environmental standards, might give the appearance of doing good for the environment but seem destined to be a boondoggle if pursued.

I don't particularly disagree with anything in Norm's article, and I have a hard time reading it as disagreeing with what I actually wrote either. But the vibe of the whole piece feels like it's trying to disagree with what Norm thinks I'd written. I must have worded things particularly badly in that Spinoff piece.

* UPDATE: To be very clear: this is just an example of a recent tax change encouraging the timing of divorce. I'd need to dig into the tax code of the early '90s to know what was going on in the anecdotal account I provided. But there are plenty of other potential ones. I've even heard some folks get married to get in-state tuition.

An odd kind of cycle

The UK Parliament seems a mad place.

I used to teach micro theory - or at least when Seamus was on sabbatical. He understood the math better than I did, and would likely have corrected one or two things here.

Completeness was pretty easy. Nobody actually keeps the full set of preference relations in their heads. Most of the time, preference is only discovered in choice anyway. But it's conceptually easy.

Reflexivity - that's just like dotting the i in completing the requirements. Honestly, I've never thought hard about the reflexivity inequality. That an apple is at least as preferred as an apple seemed more like dotting the i in completing the axioms - not something of any particular consequence. Varian's text had the assumption as trivial. For all x in X, x is at least as preferred as x. Yawn.

It would be madness to imagine otherwise. How could something be less preferred than itself?

For my not-all-that-mathematical brain, identity meant this had to reduce to an equality rather than an inequality: if x is x, then flipping the x to the other side of the inequality meant the only way it could hold was if it were actually an equality rather than an inequality - but it never mattered. How could an apple not be as preferred as that very same apple? How could anyone possibly be other than indifferent between an option and itself? And if they aren't, how can we say that they're really identical? The failure of it would have to mean that x and x aren't really the same thing. We wouldn't look at somebody willing to pay zero for a bottle of water when standing next to a tap, but willing to pay $5 for it at a music festival, and conclude that reflexivity had failed; we'd say that the goods were different because of differences in time and place.

In any case, we never spent any time on it. It didn't really matter.

When we'd get to the transitivity assumption, things would get more fun. I'd tend to illustrate by example.

If someone had intransitive preferences, you could quickly turn that person into a money pump. If they really prefer an apple to a banana, and the banana to a carrot, and the carrot to an apple, you can structure a series of trades where they keep giving you cash plus their banana for your apple, then cash plus their apple for your carrot, then cash plus their carrot for your banana, and so on. Sylvester McMonkey McBean for the win.

It's a mad sort of preference configuration.

But it comes up in social choice theory where it's far easier to generate intransitive social preferences out of underlying transitive individual preferences, so long as enough people have non-single-peaked preferences if it's a unidimensional choice, or if there's no median in all directions in multidimensional realms. And we'd illustrate that in the public choice classes with the beautiful McKelvey result. Individual rational preferences leading to what seems collective madness and the ability for a strong agenda-setter to arbitrarily choose outcomes.

And that all then brings us to Brexit. I have no clue what's there going on.

Here's the BBC's tally on yesterday's series of votes.

How MPs voted

	For	Against	Defeated by
Confirmatory referendum	268	295	27
Customs union	264	272	8
Labour's Brexit plan	237	307	70
Common Market 2.0	188	283	95
Revoking Article 50 to avoid no deal	184	293	109
No-deal exit on 12 April	160	400	240
Malthouse Plan B	139	422	283
EFTA and EEA membership	65	377	312

Recall that in these up-down votes, they're all implicitly running against the status quo. If they're all defeated, the status quo obtains. In the absence of other action by Parliament, no-deal exit on 12 April obtains.

None of the options enjoys majority support. But does that make for an Arrow/Black/Condorcet cycle? Not really. One option did beat all the other options. That option is the status quo. Every one of these options lost to the status quo. That makes the status quo - Brexit with no deal on 12 April - the Condorcet Winner.

It's a Condorcet Winner powerful enough to defeat itself as option 400 to 160 though.

Reflexivity says that an option should be at least as preferred as itself. No-deal exit on 12 April (the status quo) is preferred over No-deal exit on 12 April (the alternative voted on option) by a margin of 240 votes. That makes it at least as preferred as itself. But not if we flip which side of the inequality the status quo and the identical voted-on option are on.

We haven't had the sequence of pairwise votes of each option against the others that might reveal the cycle. But if completeness and transitivity kinda imply reflexivity, perhaps the apparent failure of reflexivity here suggests the failure of transitivity.

I expect the real answer in this particular case is that the voted-on option was not the same as the status quo: it was instead being compared to the other options put in a sequence of up-down votes against the status quo. So Members were registering their dissatisfaction with the status quo as against the other available options, and their desire to maintain the option value of keeping other options open.

It would also help make sense of the utter inability of the agenda-setter to use the McKelvey result to actually get anywhere. No option can ever beat the status quo because the status quo is supported both by those who want a no-deal exit and by those who like the option value of trying again for their more preferred option later.

What a mess.

In Medio Stat Virtus

It looks like Statistics NZ no longer produces the median hourly wage figure I used to use to run comparisons between median wages and the minimum wage.

I've kept a running brief on minimum wage hikes here for years, watching the NZ minimum wage rise relative to the median.

So when I had a media query about the minimum wage hike coming next week, I went looking again for the median wage series. I used to draw those out of the June NZ Income Survey releases. But that survey was discontinued.

And while the Earnings and Employment Survey has a lot on average hourly earnings, it doesn't have medians.

After much poking around on the Stats website, through data series now listed under archive.stats.govt.nz rather than the main site, I tried the Stats NZ live chat. The support agent there was excellent - and we rather quickly figured out that the series is discontinued. QES in Dot.Stat has median weekly earnings, but not hourly. Infoshare has average hourly earnings in QES, but not medians.

The closest we were able to get to was the table of annual percent change in median hourly earnings reported in their Labour Market Statistics release June 2018 quarter. But since that doesn't have an anchor in levels (the percent changes are overall, and the levels reported are split by gender), you can't get levels out of it either.

Springsteen complained of 57 channels with nothing on. Stats is working on 120 wellbeing indicators including trying to figure out how to measure spiritual wellbeing, but the median hourly wage series is discontinued.

My helpful support agent said my request for reinstating the median series will be passed along though.

I so very much wish that all of the time and effort that has gone into the Indicators Aotearoa project trying to develop 120 wellbeing indicators over things that are often impossible to measure had instead gone into fixing the back-end systems at Stats so that it could have a front-end interface like IPUMS that would just let you query the raw data at the back end.

It would be easy enough to pull up your own median series if we all had the raw survey data (ok, a bit of a pain). But we can't have the raw data. And we can't have a CURF - or at least not yet.

A front-end that could generate the needed tables out of the back-end data, rather than requiring Stats folks to make guesses about which ways of cutting the data would be of interest to users, would just be so much better.

I just don't get a system that prioritises "Hey, let's try to figure out measuring spiritual capital" over having a continuous median wage series.

No sir, I don't like it.

Since the Friday attacks:

• We've had armed police on the streets. They say it won't be forever. But they've made no case for the need for it. Recall that officers were on the scene within about 6 minutes of the Christchurch attack, and nobody's made any case that having to get the guns out of the trunk of the car were any kind of hindrance in the response. 
• They're shifting the Cuba Dupa festival indoors. It's great that Homegrown went on, though everybody freaked out about (apparently) one guy with a tattoo. There is no specific threat to Cuba Dupa. 
• Simon Bridges wants an inquiry into security services, and to increase their powers. Seems odd to want the latter before the former's been done. 
• The murderer's text has been deemed objectionable. It is objectionable, in the common-sense meaning of the term. But a blanket ban on its possession in New Zealand means that foreign media can read and report from it without seeking permission from the censor's office, while New Zealand media cannot. That's just a bit odd. Mike Reddell has decent summary. So does Graeme Edgeler. Recall that the New Zealand Censor cannot really ban anyone from accessing anything. The Censor can only make it illegal to possess things. So anybody who wants the text to read on their own will find it on the web; any journalists wanting to put the thing in context would be in legally risky position because reporting on it without the Censor's permission means admitting to a criminal act. 
• Stuart Nash, Police Minister, wants a gun registry. Canada's was advertised at $125 million in the 1990s, wound up costing $2 billion, and was scrapped as being useless. 

None of this is the Outside of the Asylum. 

Right Here, Right Now

My column in this week's Insights newsletter - now a bit dated. The newsletter comes out at noon; our national moment of silence was an hour and a half after that.

Last week feels like it was a year ago. And the past week has made the world feel a little smaller.

Last night, the Rt. Hon. Stephen Harper, Prime Minister of Canada from 2006 through 2015, addressed members and guests of the Initiative at our annual retreat.

We found that Laureen, Prime Minister Harper’s wife, had lived in Christchurch as a young woman. Streets and buildings that stood as backdrop in news scenes playing in international media, for the second time in a decade and again for terrible reasons, were ones she remembered.

The world is smaller than we think.

Harper’s address reminded us that New Zealand and Canada remain rather special places in a world growing worryingly dark.

While living standards globally are better than ever, Europe, the UK and America have polarised – not along traditional left/right lines but on a newly emerging populist/elitist axis.

Trump and Brexit are obvious examples, but so too are right-wing populism in Germany and France, and the strange marriage of the populist left and right in the Italian government – which Harper likened to a coalition between Trump and Bernie Sanders.

Drawing on his recent book, Right Here, Right Now, Harper said this polarisation is inevitable when mainstream policy stops addressing the concerns of lower and middle-class voters.

In America, for what seems the first time, voters are telling pollsters they expect their kids to have a worse standard of living than they do. That builds an appetite for populism, and while populists have a keen nose for policy failures, they offer no positive policy agenda to solve the problems.

Harper rightly noted that Canada and New Zealand stand apart from those trends. In both countries, household income growth has been broadly shared across the distribution. We have not seen the income stagnation present in America. That makes for a better polity. It also makes for a country better able to accommodate migration; Harper noted Canada’s welcoming attitude to migrants and strong growth in immigration.

Populist resentment fuels anti-migrant sentiment. See Europe, the UK and America. In New Zealand, a broken housing market gave us a too-xenophobic 2017 election campaign. But last Friday’s tragedy brought us together rather than drive us apart.

During our moment of silence this afternoon, let us remember the victims – and renew our commitment to building a better New Zealand for all New Zealanders.

Subscribe to our newsletter here.

Punching Nazis?

In yesterday's Herald, on the relative merits of punching Nazis:

I keep coming back to one tweet. Amid a steady stream of rage driven by pain and sorrow, a note of grace. Twitter stalwart and all-round decent bloke Lew Stoddart wrote:

"The mosque on Clyde Street is besieged by flowers and candles. A steady stream of people from all walks of life arrived during the 15 or so minutes I was there, including local scarfies dressed up for St Patrick's day, with gifts, food, or just to pay respects.

"And their humility and depth of aroha is magisterial. 'We failed him,' they told me. 'He lived with us in this city & we let him turn out this way.' And they expressed sorrow for the decades he will spend in solitary confinement.

"The Clyde Street mosque was his original target."

But it wasn't the only such note. We also heard Farid Ahmed forgive his wife's killer, saying he would pray for him. "I think probably he went through some trauma in his life, probably he wasn't loved … I don't hate him at all, not at all."

And it might be the only way out of this.

A year ago, Mother Jones reported on the American "Life After Hate" movement seeking to reform white supremacists: skinhead members of real and violent gangs. It is a terrible and difficult problem. Those who could not find pride in the content of their character found it instead in the colour of their skin.

When race becomes identity, stopping racism is a lot harder than, as is sometimes suggested on Twitter, finding Nazis to punch. At least according to the activists working to de-radicalise white supremacists, confrontation hardens attitudes rather than changing minds.

One of them said: "The uncomfortable truth is that the best way to reform racist thugs may be to offer them precisely what they aren't willing to offer others, and precisely what many people in this polarised political moment feel they least deserve: empathy."

It is hard counsel when every instinct screams for retribution. It is even harder counsel when we reflect on the injustice. It is blindingly obvious that we would be seeing far less compassion if a Muslim migrant had killed 50 white New Zealanders in a church. Every racist would, in that world, be emboldened.

But the logic of aroha is sound in either case. When attacked for being a member of a group it is far more natural to defend the group than to denounce it — especially when much of one's self-identity is bound up in group membership. It only hardens positions.

An invitation to talk with others who had doubts about their own membership in racist communities, and to then join with other "formers" as a new identity, can simply be more effective.

The statements of incredible grace from Friday's survivors should make us all want to be better people. If any members of Parliament regret having found electoral advantage in race-baiting and xenophobia, their own path to aroha may inspire others who badly need to make that journey.

Posting has been light and will continue to be this week - I'm up in Auckland for our Member's Retreat.

Vaccines

Hooray, New Zealand gets a measles outbreak. Whether it's due to middle-class antivaxxers, or kids whose parents just have a hard time getting them to the GP - who knows.

But what doesn't make sense to me is why school-based immunisations aren't comprehensive.

Year 7 and 8 students get immunisations at school - for schools that are participating. The kids there get their tetanus, diptheria and whooping cough booster, and the HPV vaccine. 

There's a national vaccinations register, so the public health nurses going into the schools to deliver vaccinations would know which kids haven't had their measles shots. 

So my dumb questions:

1. Why aren't vaccinations provided at all schools rather than just at some schools? It seems far more efficient to send one nurse out to vaccinate a year-cohort of 20-100 kids than to send 20-100 families each to the GP for a vaccination. 
2. Why aren't the public health nurses providing the MMR vaccine along with DPT for Year 7 kids for those kids who missed the shot when they should have had it? The shots are government funded anyway already, via the GP. But it's cheaper and more comprehensive for the government to provide them via the public health nurse who's already at the school than through GP offices. 

What am I missing? Is this a doctor-cartel thing where they really like getting the revenue stream from in-GP-office shots?

Thanks to @mikeythenurse for relevant discussion.

Midwife-led care

Midwife and researcher Ellie Wernham and Prof Diana Sarfati discuss their work showing worse outcomes under midwife-led care, and the Ministry of Health's coordination with the College of Midwives in response to that work.



Government policy might not change, but you can update your practice.

The practice we followed a bit over a decade ago:

1. Find a midwife the second you think you're pregnant - or even earlier. Get one with proper training, not just the midwife certificate. You want a midwife who had rigorous nurse's training prior to going in for specialisation in midwifery. The ones who have training go very quickly. If you wait, you will be left with a midwife with weaker training. 
2. Pay for shared care with an obstetrician anyway. In 2008, we paid a fixed price of $2k; in 2010, it was $3k. At the time, it was about the same price as a decent flat-screen TV; we kept the old CRT around for a few more years instead. Having your obstetrician available on-call during delivery to provide a c-section if needed is worth it. 

Previously: The Midwives have a history

Reducing harm or barking at cars?

Me at Newsroom:

There’s an old joke about the neighbourhood dog that loved to chase cars down the road – what would it ever do if it caught one?

The Government has been a bit like that with tobacco harm reduction. A very promising car has come around the corner and stopped. And the puzzled dog is standing there growling at it.

For decades, government has wanted to reduce smoking rates. Why? Smoking causes cancer, myriad respiratory problems, and shortens lives.

To reduce smoking, government used the tools it had at hand – which have gotten some of the job done, even if it was at a cost.

Tobacco excise collects at least three times more in tax than smoking costs the health care system. The 2001 McLeod Tax Review found the relatively low excise rates then in place to be indefensible – if their purpose was to compensate the Government for smoking’s cost to the health care system. Background documents for the Cullen tax review suggested that continued excise hikes would do relatively little to further reduce smoking rates, while imposing substantial regressive burden on poorer communities that continue to smoke.

Plain packaging regulations with graphic warnings may discourage kids from starting smoking, but the evidence is weaker than you might hope: SmokeFree regulations have made smokers pariahs, increasingly barred from places where decent people might witness their habit.

Even though smoking rates have declined, nothing suggests that current policy will achieve the Government’s goal of getting smoking down to less than 5 percent of the population by 2025.

And so we come to the promising car that has come around the corner – new and safer ways of accessing nicotine.

Spend any time walking around a downtown urban centre and you will notice the clouds of vapour coming from former smokers who have switched to a less harmful alternative. Rather than berating smokers for their habit, vaping offered a way of delivering nicotine without combustion’s nasty consequences.

But vaping is hardly the only alternative out there.

Nicotine gum and patches have long been prescribed as stop-smoking solutions, but simply haven’t worked for a lot of smokers trying to quit.

Swedish snus is a powdered tobacco contained in a small sachet that looks like a teabag; users place the sachet behind their lower lip. Snus is far safer than smoking or traditional chewed tobacco, has been an important part of Sweden’s decline in smoking rates since the 1980s, but has only recently became available in New Zealand. And new technology that heats tobacco rather than burn it, and consequently avoids creating the carcinogens that come with combustion, is now on the market too.

There have to be a wide variety of options available for people wanting to cut down or quit smoking because different things work for different people. And making that work requires regulatory and tax frameworks that are fit for purpose rather than refitting those designed for cigarettes.

Last week’s headlines told us Philip Morris offered to stop selling cigarettes in New Zealand if it received a tax break – along with a rather smug reply from the Prime Minister that the company could feel free to stop selling cigarettes any time it liked and shouldn’t need a tax break to do it.

But the reporting really missed what has been going on.

Philip Morris makes one of the newer reduced harm products. Its Iqos device heats non-combustible tobacco rather than burn it. Iqos is less harmful than smoking, but perhaps not quite as safe as vaping – the science is still being settled on that one. Nevertheless, ‘heets’ (the tobacco sticks used in Iqos) face the same tobacco excise rate as cigarillos. Excise on cigarette tobacco is just over $1,300 per kilogram or about $0.92 per cigarette. Excise on other tobacco products, from cigars and cigarillos to snus and ‘heet’ sticks, runs just over $1,150 per kilogram of tobacco.

In every other aspect of tobacco control policy, the Government has been adamant that price is an effective deterrent. That is why it imposes excise taxes that cost a pack-a-day smoker more than $6,700 per year, despite the regressive effects of that tax regularly highlighted in Statistics New Zealand’s inflation updates.

If the Government wants people to switch from smoking to less harmful alternatives, why does it impose the same tax on combustible tobacco as on tobacco that is used less harmfully? A 10-gram packet of snus selling for $21, containing 15 sachets, draws about $11.50 in excise – or about $0.77 per sachet. A 10-gram packet of cigarillos would draw the same excise.

It gets worse. Iqos sticks are subject to smoked tobacco’s plain packaging rules with graphic warnings about the dangers of cigarettes. It could well be worth having a warning on the packs that while they are safer than cigarettes, they aren’t candy. But how does it encourage uptake of reduced-harm alternatives if their packages look just as dangerous as the actually dangerous products?

The dog just does not know what to do with the car it has caught, so it sticks to what it knows – growling. When the Prime Minister quipped that Philip Morris could simply stop selling cigarettes here, she absolutely missed the point. Other cigarette companies would fill the gap in the market. But if reduced-harm products had a greater price advantage over cigarettes through a risk-proportionate excise regime, more smokers overall might switch.

Vaping is a really important part of tobacco harm reduction. But it is not a solution that will work for all smokers. Making sure the regulatory regime is right for other reduced-harm products matters. That means a much lower excise rate for reduced-harm tobacco products – or even zero excise through 2025 – and a bit of sanity in the rules around product packaging.

Morning roundup

This morning's worthies:

• Michael Reddell in defence of capital charges and higher public sector discount rates. Bottom line: you will have nonsense if public sector entities don't have to account for their costs of capital. 


• Construction and Corruption: the game. Based on Montreal's construction sector. 

  Each player is a Construction boss, responsible for a Construction contract on each turn. If you do not finish your contract, you keep it, and get paid again the turn after.
  
  The incentive is to keep your work unfinished as long as possible. Bosses can send their workers to opposing players’ sites, and finish their work instead. Thus the dynamic of the game is ‘screw your neighbour,’ with the added element that players’ cash totals are secret. Each turn also holds an election for mayor, who can punish their opponents, and reward supporters.

  Relevant to the environment in which SNC-Lavalin grew up.


• Insurance rationing in Wellington. Why is this market not clearing on prices? Are there just fixed costs in contracting for greater reinsurance coverage?


• The perils of woke governance. Kerry McDonald on some of the dangers in the wellbeing approach. 


• Duncan Greive on Ian Taylor and computer science innovation at Otago Uni


• 100 females for every 72 males in Australian universities in 2016.

YIMBY - local bottle shop edition

The local Khandallah DVD shop finally closed down. We'd rented DVDs there roughly once a month - there's a lot of older stuff that just doesn't stream in New Zealand.* So, it looks like we'll have to drive out to Aro Video a bit more often for those things.

In its place, a bottle shop has applied for permission to open. The Council website provides a lot of ways for people to lodge objections but doesn't make any provision for those, like me, who'd like to say Yes In My Back Yard.

So I've mailed the following letter to their Objections address. I don't know whether it will do any good, but remain ever-hopeful.

Secretary of the District Licensing Committee
PO Box 2199
Wellington 6140

Re: Application of The Bottle-O Khandallah, 5 Ganges Road, Khandallah

Dear DLC,

I am writing in support of the application to open a bottle shop at 5 Ganges Road, Khandallah.

I have lived on Nicholson Road, an 8-minute walk from the proposed location, since 2014 with my young family. I am very happy with the excellent beer and wine selection at the local New World; I will be very happy to also have easier access to a local bottle shop. We otherwise do our spirits shopping at Moore Wilson or at Johnsonville, neither of which are particularly convenient.

I expect a Khandallah-based shop will provide a range and selection that suits the local market, and I will appreciate having access to that within an easy walk. Some might object that Ngaio or Johnsonville bottle shops are close enough and that one in Khandallah isn’t needed. Well, Ngaio has a butcher shop, but the Khandallah butcher shop runs a brisk trade; Johnsonville has two Countdowns but our New World also does well. A bottle shop in the village will do no harm and will be great for those, like me, who like to do our shopping while walking from home.

I also strongly urge that the DLC weigh customer access against the inevitable police or medical officer objections demanding more limited hours. Khandallah town centre runs until about 9pm; the application requests that the shop is open until 9pm. The shop should be allowed to run until 9pm, which matches the hours of the local New World. Professionals like me will often do their shopping after getting the kids to bed – so, in the 8-9pm period. I’m generally rushing through at a quarter to nine. Earlier closing times would be an undue burden.

Since the Council website provides a lot of information about how to object to things and no particular way for those who don’t want to object to make their views known, I thought it worthwhile to send in this note. I hope to be a happy customer of the shop, one of the countless moderate drinkers who impose no harm on anyone, who pay far more in excise than we should, and whose views are rarely heard when these sorts of applications are made.

Yes In My Back Yard, please. And perhaps consider making some changes to your consultation website so you might hear more from those of us who welcome things like this.

Sincerely,

If we all start submitting in support of stuff that usually draws objection, maybe the equilibrium changes a bit.

Previously: For a bigger Khandallah


* We subscribe to Netflix, Amazon Prime, Neon, and Anime Lab. Egads but Neon is terrible.

Trust in Online Markets - Condliffe Memorial Lecture

Berkeley's Professor Steve Tadelis is this year's Condliffe Memorial Lecturer at Canterbury's economics department.

You can register here for the lecture scheduled for 5.30, Monday 1 April, in the Undercroft. Canterbury's blurb:

The growth of online electronic commerce and markets is attributed not only to their ease of use but also to the fact that they provide reputation and feedback systems that help create trust. Recent research has exposed, however, that feedback systems are biased, suffer from “grade inflation”, and do not clearly differentiate between higher and lower quality sellers. This lecture highlights recent research that addresses these concerns and presents ways to increase the effectiveness of online reputation systems and markets.

Tadelis spent time both at Amazon and at eBay's research lab. His bio at Berkeley explains why you might want to fly out to Christchurch for this one, if you're in the industry here in NZ:

These days my research primarily revolves around e-commerce and the economics of the internet. During the 2016-2017 academic year I was on leave at Amazon, where I applied economic research tools to a variety of product and business applications, working with technologists, computer and ML scientists, and business leaders. During the 2011-2013 academic years I was on leave at eBay research labs, where I hired and led a team of research economists who focused on the economics of e-commerce, with particular attention to creating better matches of buyers and sellers, reducing market frictions by increasing trust and safety in eBay's marketplace, understanding the underlying value of different advertising and marketing strategies, and exploring the market benefits of different pricing structures. Aside from the economics of e-commerce, my main fields of interest are the economics of incentives and organizations, industrial organization, and microeconomics. Some of my past research aspired to advance our understanding of the roles played by two central institutions---firms and contractual agreements---and how these institutions facilitate the creation of value. Within this broader framework, I explored firm reputation as a valuable, tradable asset; the effects of contract design and organizational form on firm behavior with applications to outsourcing and privatization; public and private sector procurement and award mechanisms; and the determinants of trust. 

Some of his relevant papers and working papers:

• Reputation and Feedback Systems in Online Platform Markets  
• Returns to Consumer Search: Evidence from eBay  
• Two-Sided e-commerce Marketplaces and the Future of Retailing
• Buying Reputation as a Signal of Quality: Evidence from an Online Marketplace
• The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment

Oh Canada

This week's column in the Initiative's newsletter covers the latest Canadian scandal.

Oh Canada

Partisanship is a powerful and deadly drug. Canada is the latest in a too-lengthy list of places badly in need of rehab.

In response to harsh criticism of his involvement in and handling of a corruption scandal, Canadian Prime Minister Justin Trudeau told his Party’s supporters this week that his policy agenda is too important to risk.

Canadian political parties have been too quick to identify the good of the party with the good of the country. As Canadian columnist Paul Wells put it, “a country gets into trouble when it turns every question into an electoral question.”

So what happened?

Last week, Judy Wilson-Raybould, Mr Trudeau’s former Attorney-General and Minister of Justice, testified that the Liberal Party hierarchy, from the Prime Minister down, pressured her to go easy on politically powerful Quebec-based engineering firm SNC-Lavalin.

Facing Canadian prosecution for bribery in Libya, SNC-Lavalin threatened to shift its headquarters out of Quebec. With a Quebec election in the offing and a federal election to come, the loss of a corporate headquarters and associated jobs was too great a political threat. So the Liberals’ enforcers strongly suggested that the Attorney-General enter into a more accommodating arrangement with the firm.

This week, a second cabinet minister stepped down over the same issue, saying she could not defend the Cabinet’s decisions as required under Cabinet responsibility without compromising herself, or the constitution.

On Monday, Prime Minister Trudeau noted that he regretted her decision, that his government was thinking hard about the SNC-Lavalin case, but that it is vitally important to the national interest that the Liberals be re-elected.

In short, good Liberals should be happy to sweep the matter under the carpet to avoid letting the Conservative Party win the coming election.

No price of power is too high to pay if you have convinced yourself that the entire fate of the country is at stake. What is a little erosion of constitutional norms and the rule of law if the nation hangs in the balance?

The question should really be reversed: what is the nation if its political elite quietly condones gross impropriety in pursuit of partisan interest?

We in New Zealand are fortunate that nobody can credibly pretend that a change in government portends the end of days.

But it is up to all of us never to allow our politicians to let partisan electoral ends justify questionable policy means. 

It has long been considered racist, or at best impolite, for those outside of Quebec to point to the obvious corruption problems in Quebec.

During the sponsorship scandal of the late 1990s and early 2000s, Chretien's Liberal government broke standard financial administration rules to funnel money to parts of Quebec at risk of voting for independence. The fall of Paul Martin's Liberal government and three fraud cases ultimately followed.

Maybe you could have then claimed that the country really was at stake.

But that doesn't explain the 2008 Conservative-led prorogation crisis, in which Harper prorogued Parliament to delay a confidence vote, or Paul Martin's 2005 trick in delaying a confidence vote to give give himself enough time to buy a floor-crosser with a Cabinet slot.

America's in far worse shape, sure. But everybody needs to be on guard.

The Laurentian Elite

Jen Gerson nails Trudeau's problem, and Canada's problem, in the New York Times.

Mr. Trudeau came to power in 2015 on the promise of a new, revitalized Liberal Party, removed from the stale old boys’ club of yore. The party, though it imagines itself as representing the quintessential ideals of Canadiana, has a long track record of corruption and chicanery, particularly in Quebec.

With an electoral base in the country’s most heavily populated regions, like Quebec, the Liberals have enjoyed many decades in power. It is not without merit that they are referred to, derisively, as Canada’s Natural Governing Party.

Power brings with it certain habits. This is true everywhere, but in a democratic country with a population the size of California spread across a gigantic landmass, influence runs in a geographic network that we describe in shorthand as the Laurentian Elite, after the St. Lawrence River that runs through eastern Canada. Mr. Trudeau, the son of former Prime Minister Pierre Elliott Trudeau, is very much a creature of this elite.

And so is SNC-Lavalin. Not just any company gets its calls taken by the prime minister’s office. Founded in 1911, SNC-Lavalin is a crown jewel in the Quebec corporate firmament. The company’s lobbyists have long ties in both Conservative and Liberal governments. Its lawyers include a former Supreme Court justice. A retired senior federal official is on its board. One of its corporate directors also sits on the board of the Trudeau Foundation. Quebec’s public pension funds own about 20 percent of SNC-Lavalin’s shares.

...

Ms. Wilson-Raybould was the first First Nations person to be appointed justice minister. She is a member of Parliament from Vancouver, British Columbia, to boot. By virtue of this background, she is not someone who has been historically well represented in the cozy corridors of Canadian power. Why should she care about SNC-Lavalin? Why would she stake her independence and her reputation on the company’s survival?

It’s no coincidence that she was replaced at the justice ministry by David Lametti, a member of Parliament from Montreal who even now has not ruled out saving SNC-Lavalin with a Deferred Prosecution Agreement. The rule of law is a very grand Canadian virtue until, it seems, it proves to be a barrier to Liberal electoral prospects in Quebec. It is a small country, after all.

Three decades ago, Preston Manning campaigned against a Canada that looks like this. Canada still looks like this.

Markets for lemons and ticket scalping

The past week's hooplah over ticket scalping missed what I think's the most fun problem in the whole mess.

How do you, as a third party, run a resale market for event tickets that are issued digitally by another agency that wants to see you fail?

There are real problems facing buyers. How can you tell that the ticket you purchase on Viagogo is authentic rather than fraudulent, and how can you tell that that same ticket has not previously been sold?

The problem is easy if you think about an integrated ticket issuer/reseller. The issuer can cancel the initial ticket if the person who initially bought it wants to sell it back to the issuer or to the issuer's reseller, then sell the new ticket.

In that setup, you don't have to worry about whether the person who sold the ticket to the reseller had previously sold a different digital copy of it to someone else. The ticket is cancelled, so any prior versions using that ticket's QR code would be void and simply wouldn't work if it showed up at the venue.

But a third-party on-seller cannot do that. And neither can anyone who bought a ticket and honestly wants to on-sell it once and once only. The sale then requires trust, because there is no way of verifying whether there were any prior sales. Even Viagogo can't do it because while it could check that it isn't selling multiple tickets for the same seat, it can't check whether that seat was previously or simultaneously sold on other platforms or privately.

So what's a solution?

One solution relies on the initial purchaser's reputation, and the buyer's reputation. If I buy a ticket for a concert and then offer that ticket on Twitter, from my real-name account, noting that I can't make the concert and that I'm taking offers - I know that I bought a legitimate ticket, and anyone buying from me knows that I would be publicly shamed if caught selling a ticket that didn't wind up working because it had been on-sold multiple times.

But that also makes me something of a hostage: if that buyer sells the ticket to someone else, whether once or repeatedly, then claims that the ticket didn't work - that buyer could attempt to extort me for a refund.

TradeMe has a lot of experience in making markets that work based on reputational feedback mechanisms, but they don't allow ticket on-sales on their platforms.

Another potential solution would have the payment held in escrow by a third-party platform pending verification that the ticket worked, but without the venue being willing to confirm whether a ticket worked, that too would have problems if a buyer went to the show then claimed to have been bilked.

And all the way through it, the initial ticket vendor absolutely does not want any of the secondary markets to work, in part because it would prefer to establish its own secondary market to be able to take some of the uplift in price for events it had initially underpriced relative to revealed demand.

Like I said - fun problem. Everybody's moralising about the rights and wrongs of buying something at a low price and selling it later at a high price (or losing your shirt because the venue had not underpriced the tickets relative to demand in the first place); it's far more fun to think about how these kinds of markets could work, and what happens when important players don't want them to work.

More census woes

Continued census problems hit the Dom's front page today, and the other papers too, as we hit the one-year anniversary of the start of the 2018 census. 

Bryce Edwards has the roundup of all of them at the Herald

A number of newspaper stories have been published today about the anniversary of the 2018 census debacle. The most important is Thomas Manch's 365 days and still counting: Census 2018 results nowhere to be seen. In this, he explains that "The 2018 census data release has been delayed three times due to low response rate" and "Statistics New Zealand remains tight-lipped about when the long-delayed results will be available".

...

One specialist is cited as saying that although the 2018 census participation rate is estimated to be about 90 per cent for the general population, "the response rate of Māori may be as low as 80 or 70 per cent in some corners of New Zealand". In addition, "more than 20 new iwi won't be properly counted" in the census, and this is a problem because "census data was particularly important for smaller iwi trying to do good with fewer resources".

...

For a very in-depth and interesting account of the census debacle, see the Otago Daily Times feature story, And then there were nine, by Bruce Munro, which was published in the weekend. This is, so far, the ultimate exploration of what went wrong.

Kathy Connolly, Stats NZ's census general manager, answers questions put to her about whether the debacle was a result of the previous National Government running down the public service and replies "no comment". Was the debacle due to Stats NZ being asked to "Go do a cheap census"? Again: "No further comment".

There is also great debate in the article between Labour and National politicians about underfunding and oversight. They both blame each other, of course.

Munro also reports: "What exactly happened is hotly debated, but not loudly. Most of those close to the action will not talk on the record. At an operational level, when it came to rolling out New Zealand's first largely online census, several wheels fell off, they say. There wasn't enough publicity. Statistics New Zealand relied on the diminished postal system to get initial information to people. There were not enough forms. Fewer people were employed to follow up on those who had not filled out their form."

Brian Easton's suggestion of a 2021 Census looks reasonable if it's feasible.

Pharma $20-sidewalk-bills

This one's been puzzling me since I saw it reported first last week. The underlying study got a lot of press when it was first published in 2013. Here's the original press release; it's easy to find lots of follow-up stories based on it. It's resurfaced with Jezebel figuring the patriarchy was to blame. Siouxie Wills takes it up again in today's Dom.

Long story short, one study suggested Viagra is effective in mitigating menstrual pain - but nobody seems to have known about it or prescribed if for that purpose. And nobody seems to have replicated the initial trial.

So what's up? Nobody typically complains that Big Pharma isn't quick to jump on any profit-making opportunity. The usual complaint goes the other way.

First potential explanation - maybe it isn't nearly as effective as the first published study suggested. There were 25 subjects in the 2013 trial. The trial showed efficacy against a placebo, but didn't test against existing treatments. This 2019 metastudy does not include any follow-up tests of Viagra. Why wouldn't there be follow-up trials or use?

My next instinct's to look at regulation.

The FDA rules say that once something's been proven safe and effective for one use, it can be prescribed for other uses. So there's no particular legal barrier to doctors prescribing Viagra for menstrual pain. But a lot of them might not know about it. It has been legally difficult to market pharmaceuticals for off-label uses, but I'm not sure on the current state of play on that. And doctors might reasonably be reluctant to prescribe based on a single study of 25 subjects.

Efficacy trials aren't the cheapest things in the world, and might be necessary to market Viagra for a novel use - or to convince doctors to prescribe it. But we aren't talking about some rare disease thing where there'd be a small number of customers. So why mightn't they have gone for it?

One potential reason: you can get a patent extension by registering an older drug for a novel use.

In addition to patent protection for the original compound and method of use, patents directed to new uses and treatment indications can be obtained. Developing new methods of use for identified compounds can be a successful strategy for maximizing research dollars and for increasing the commercial life.

Several pharmaceutical companies have successfully obtained patent protection for new methods of use. For example, Merck originally developed, patented, and marketed finasteride as a treatment for benign prostate enlargement under the brand name Proscar. Additional patent protection and FDA approval were sought when a new use for finasteride — treating male pattern baldness — was identified. Finasteride for the treatment of hair loss is marketed under the brand name Propecia. Similarly, the compound atomoxetine was patented in the early 1980s by Lilly and initially investigated as a treatment for depression. Further research and development of atomoxetine led to the identification of a new use for this compound in the treatment of attention deficit hyperactivity disorder. Lilly has obtained patent protection and FDA approval for this new use, marketing it as Strattera. More than two million prescriptions for Strattera were written in its first nine months on the market.7

Ideally, more than one of these approaches should be employed to extend patent protection. For example, in addition to developing a once-weekly formulation, Lilly sought to minimize its losses from the expiration of the Prozac patent by obtaining a patent and FDA approval for a new medical use of fluoxetine in the treatment of premenstrual dysphoric disorder (PMDD). Lilly markets fluoxetine for PMDD as Sarafem and has secured patent protection until 2007 for this new indication.

But that doesn't seem to work here - the patents on Viagra are up, and the research work on the alternative use is from 2013. If it were patent extension, it should have been filed a couple years ago and available by now.

The most plausible candidate explanations then, in descending order of plausibility, although my priors are fairly flat:

• Unpublished follow-up trials showed the first study to have been a fluke;
• The costs of proving efficacy for the novel use are high relative to the likelihood of being granted a patent extension based on the novel use - I don't know enough about practice here;
• Maybe the Phase I trials only included men, so the costs of a new trial are much higher than I'd thought;
• There's some other regulatory barrier in here I don't know about;
• Pharma executives are idiots, and all potential entrants are idiots too. They're leaving a pile of money on the table.

If I had to give odds - at least 2 chance in 3 that the first one's the right explanation. But I've wide confidence intervals here. Anyone have better information?

Oh Canada

Time flies in politics. Wasn't it just yesterday that Justin Trudeau heralded a new approach to politics?

Yesterday, Jody Wilson-Raybould, who served as Trudeau's Attorney-General until very recently, testified that the Liberal Party apparatus, from Trudeau on down, pressured her to pursue leniency when it came to SNC-Lavalan - a politically well connected Montreal-headquartered firm. The firm threatened to move its headquarters if prosecuted, in the middle of a provincial election.

Here's Andrew Coyne

It was clear from the first line of Jody Wilson-Raybould’s testimony: the Trudeau government is now officially in crisis, the jobs of several of its top officials hanging by a thread.

The former attorney general did not merely offer her “perspective” with regard to the SNC-Lavalin affair, as the prime minister had airily suggested beforehand. She presented damning evidence, based on verbatim texts, contemporaneous notes, and detailed personal recollections, of “a consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the attorney general of Canada in an inappropriate effort to secure a Deferred Prosecution Agreement with SNC-Lavalin.”

This was not just inappropriate pressure by this official or that minister. It appears to have been a whole-of-government effort to wear down her resistance, if not intimidate her into submission, involving 11 different people, 10 phone calls, multiple meetings, emails, text messages, the works.

It was not just a one-time event, but continued for months, long after the decision had been made — after the director of public prosecutions, Kathleen Roussel, had decided against offering SNC-Lavalin a DPA, after Wilson-Raybould had decided against overruling her, indeed even after the matter had become the subject of judicial proceedings, SNC-Lavalin having challenged the DPP’s decision in court.

Here's Paul Wells

The dangerous files are never the obscure ones. Scandals don’t happen in the weird little corners of government, in amateur sport or in crop science. They happen on the issues a prime minister cares most about, because everyone gets the message that the rules matter less than the result.

It’s a constant in politics. In 2016 I took one look at Bill Morneau’s first budget and wrote this: “The sponsorship scandal of the late Chrétien years was possible because it was obvious to every scoundrel with Liberal friends that spending on national unity would not receive close scrutiny from a government that was desperate to be seen doing something on the file. A government that considers the scale of its spending to be proof of its virtue is an easy mark for hucksters and worse.”

It wasn’t a perfect prediction. I kind of expected the hucksters and worse to be outside government. Unless the Trudeau Liberals can produce persuasive evidence that Jody Wilson-Raybould is an utter fabulist (and frankly, I now expect several to try), her testimony before the Commons Justice Committee establishes pretty clearly that the hucksters and worse were running the show. Led by the grinning legatee who taints the Prime Ministers’ office.

When I was a kid in Manitoba, it really felt like the country was run by a corrupt aristocracy along the Ottawa-Montreal corridor, with a handful of family and company names always showing up in anything that mattered. That was part of what fuelled Preston Manning's Reform Party.

Wilson-Raybould's testimony is pretty consistent with how we thought the place really ran.

Wells has another lesson relevant well beyond Canada's borders:

I’ve never met a Liberal yet who doesn’t reliably confuse his electoral skin with the national interest. So much of what Trudeau and his minions have done in the last year stems from that instinct. Take the ludicrous half-billion-dollar bailout for people in my line of work, never explained, sprung out of nowhere in Morneau’s fall economic update—or as I now like to think of it, between Trudeau advisor Mathieu Bouchard’s meeting (yet another one) with Prince and Michael Wernick’s chat with Wilson-Raybould. You can get a lot of op-eds written with that kind of dough. Take the cool billion the Canada Infrastructure Bank coughed up to pay for a politically popular and impeccably well-connected transit project around Montreal. That money appeared, from a brand-new bank that has not funded a single other project and did not then yet have a CEO [Update, Thursday: Wrong! It had had a CEO since last May – pw], on the day before Philippe Couillard launched the Quebec election campaign. It is now impossible to believe on faith that the Canada Infrastructure Bank is not a wholly-owned subsidiary of Ben Chin, Mathieu Bouchard, Katie Telford and Justin Trudeau.

But anyway, back to partisanship. Liberals and their many friends across the land will insist that all this behaviour must have no real-world repercussions because the other side cannot be permitted to gain the upper hand. And similarly, a lot of battle-hardened opponents of the Liberals will call for the jails to be opened up to welcome fresh Liberal meat. Fortunately, there is indeed an election coming up, and I’m content to let voters decide the partisan affiliation of the next government. I offer them no counsel.

But we get to draw our own conclusions as citizens. What the former attorney general described tonight is a sickeningly smug protection racket whose participants must have been astonished when she refused to play along. If a company can rewrite the Criminal Code to get out of a trial whose start date was set before the legislation was drafted, all because a doomed Quebec government has its appointment with the voter, then which excesses are not permitted, under the same justification? If a Clerk of the Privy Council can claim with a straight face that ten calls and meetings with the attorney general, during which massive job loss, an angry PM and a lost election are threatened, don’t constitute interference, then what on earth would interference look like? Tonight I talked with two former public servants whose records rival Michael Wernick’s. Both were flat astonished that he seems not to have pushed back against this deeply disturbing, and plainly widespread, behaviour.

Conflation of the party interest with the national interest is dangerous. This kind of corruption fuels populism.

Those keen on a bit more of the background should read Colby Cosh on the problems Canada gets by having the Minister of Justice also serve as Attorney General:

What does this mean? It means that if you are the prime minister’s trusted old chum who does his dirty work, it is all right for you to visit a mere minister of justice, operating in that capacity, and to tell her what the boss wants done for crude partisan reasons. But it is quite strictly forbidden to do that to an attorney general.

In matters of hiring or statute-writing, you can go ahead, kick down her door, and tell her “Orillia needs more red-headed Hungarian judges!” or “There really oughta be a law against candy.” When it comes to prosecutions — when madame has her attorney general hat on — it is very different. You, as a sunny-ways enforcer, are not even supposed to provide unsolicited advice or hints from the prime minister. The PM may be the minister of justice’s boss, but he is not in the chain of command between the attorney general and the sovereign at all.

And listen to Andrew Coyne here: