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Budget day

For those of you who've been anxiously waiting, today is budget day.  Unfortunately I haven't had a lot of time to put together a full preview of what we'd hope to see but might as well throw out a few thoughts.

What we noted back in October is that we'll be keeping an eye on immigration receipts as a possibly early indicator of job loss/growth in 2009.  It'll be interesting to see the comparison as an estimation of how well or poorly we did for jobs in 2009 and what it means for our recession.

Ultimately though Ms. Cox has a terribly difficult job in putting together this budget given spending was high in the boom period and now we have little cushion.

What we're looking for is limited or no tax increases as higher taxes at this rather dire time could only deepen and prolong this recession.

We're also looking for reasonable borrowing.  It's inevitable that we'll need to borrow to cover our cash flow difficulties and it is a hope that we keep this as small as possible.

Finally hopefully some bold plans are put forth to cut costs and wasteful spending.  Eg. Cut back on consultants. Institute a hiring freeze.   Find ways to ensure departments cut back without cog in the wheel cop outs.  Reduce unnecessary or unrealistic social spending.  Cut unnecessary and extravagant travel and get rid of ridiculous and unnecessary expenses like the fleet of GP cars.  Perhaps radical new concepts like car sharing to reduce the government fleet and associated costs.  Who knows what we can expect.  Let's hope for the best.

None the less, let's see it, hopefully in full detail even.

Quasi pro-independence? Why now?

Why, in his first interview on policy as Bermuda Democratic Alliance's new leader, would Craig Cannonier come out quasi expressing support for independence?  For such a controversial issue it seems rather odd to do, especially when it isn't clear whether he is specifically speaking for only himself or if he's speaking for the party.  The larger question would be why mention support at all when likely there is far more to gain simply by leaving it at his first suggestion of "it's up for the people to decide?"  

In today's paper upon being asked of BDA's stance on independence newly elected leader Craig Cannonier suggests

    "That's a decision for the people of Bermuda. It's my belief it can only be done through     referendum."

Brilliant answer.  It's an important issue and the best way to resolve it is to put it to the people.  It's what many people want and he could have left it at that, but he's not done.

"Personally, someone said to me if it's not broke don't fix it, but I'm of the mind of progression like any other country who's dependent, they believe in the future and progress, and that progress includes Independence. Many of the great minds of the world became independent to progress.

Natural progress for Bermuda would probably be to embody Independence. However, what's the best thing for Bermuda is still to be determined."

What does that even mean?  Many great minds became independent to progress?  Was that through progress or they stood aside from progress?  It's not very clear.  Is he speaking only for himself or for the party?  Is his first statement on policy as the new leader the best time to be promoting personal beliefs when it will surely cloud the issue on where BDA stands and leave quite a few people wondering whether they should be supporting BDA or not.

It doesn't make a whole lot of sense to jump out and tackle a highly controversial issue right after being elected leader, especially with really unclear explanations as well as a blurring of the line between individual and party.  Let's remember, a poll released last month put 74% of people against independence. 

Now, while there's nothing wrong with being pro-independence why would you take on such a controversial issue unnecessarily when you just finished giving a perfectly reasonable answer?  Even further, "Natural progress" doesn't offer any tangible benefit that would be gained for independence, especially when one considers the EU counter argument that many countries are moving towards greater dependence on a centralized body.  

All that aside, the very phrasing sounds incredibly similar to the way Premier Brown has been putting it so he ends up coming off like he agrees with and supports the Premier's argument for independence.  With the Premier's popularity rating being so low, poll rating high against it and apprehension from the international business community about independence does it really make sense to be using such phrasing let alone tackling the issue with his own personal views now of all times?

The simple answer was that it's a decision for the people.  End statement.  Anything more and you're more likely to push away more support than gain it.  This just doesn't seem like a very solid PR move and will raise a great many questions for the party at a time when they're still trying to develop momentum.  Granted BDA is new and still learning but it is likely worthwhile that they learn to avoid these kinds of unnecessary predicaments pretty quickly because public opinion can be pretty fickle when it really comes down to it, especially on highly controversial issues like independence.

A fool and his money are soon parted

In a recent Bermuda Sun column Larry Burchall stirs up great racial symbology to convince us that our leadership has sold us like our slave ancestors once were and that foreign interests own us like slaves because of our debt.  My friend Mr. Burchall is mistaken.  Cabinet and our leadership aren’t to blame for our predicament and neither is racism.  We aren’t slaves of foreign interests; we’re still free, we just owe a lot of money.  We’re to blame for letting things get to this state; we’re the ones who willingly let ideals and values slip to the wayside while we gave out second and third chances.  Cabinet didn’t force us to do anything and certainly didn't sell us out for we willingly sold ourselves, though not into slavery but into mass debt.

1998 was the year we could finally instill the ideals and values that many had been waiting for.  It came and went.  So too did each year after.  2003 came and little had changed.  Speaking to Mr. Burchall prior to the 2003 election and expressing concerns that promises had fallen by the wayside would have resulted in a suggestion that they're still experiencing growing pains of a new leadership.  The champagne leadership and limited achievements that was the first term celebration were to be ignored on the basis that our leaders deserved a second chance, they were still new to leadership after all.  Steeped in great racial symbology, little promised and little achieved we gave them their second chance.

They say fool me once, shame on you, fool me twice, shame on me.  We were fooled into giving them a second chance and again they squandered it.  As Mr. Burchall has noted, spending went out of control as did our debts.  As others have noted our leadership continued to live the high life and yet still 1998 promises lay to the wayside.  We were made the fool.  Prior to the 2007 election we were less ready to be fooled again, great racial rhetoric didn’t hold as much weight and yet we gave in to the grand promises of “FREE”. 

So here we are, 2010, my how far we haven’t come.  We were made the fool not once but twice.  Mr. Burchall and others may be quick to cast blame suggesting it is entirely our leadership's fault, they did this, they ran up our debts, spent frivolously and lived the high life.  Sure they did these things but who allowed it to happen?  Did we not tick the box?  Did we not give them second and third chances?  Did we get fooled not once, but twice?  Did we not readily and willingly accept promises of “free” when it was our money that was being spent?  I’m sorry Mr. Burchall, but cabinet isn’t to blame for our troubles, we are.  Despite the great racial symbology I’m sorry but we won’t be slaves of foreign interests and I’m sorry but we aren’t owned by others because of our debt.  Quite to the contrary we still own ourselves and our freedom but like the vast majority of the rest of the people on this planet, if things get much worse from here we won’t be slaves we’ll be broke.  There’s an old idiom that seems quite apt at this time.  “A fool and his money are soon parted” and I’m sorry Mr. Burchall but we’ve been foolish and we only have ourselves to blame.

Fully Transparent

My cousin made a brilliant remark and observation the other night.  You see, Bermuda political parties have this rather odd quirk about them that they expect you to join the party to actually understand what they're about.  They're not interested in spreading their information and philosophy in the public realm and expect you to join on the basis of who the party is before you get to appreciate what they stand for.  My cousin's solution?  He's going to join all 3 of them.

Bermuda politics is frankly a bit ridiculous.  Look over to Jonathan Starling's Catch a Fire blog and you can often find the claims of the PLP commenters there that he's wrong to be relying on information publicly available and should be seeking out the people in the know and having personal conversations with them to 'educate' himself on the truth.  Often times people are accused of relying on information available in the public domain which is deemed as false and inaccurate and yet no alternative exists except for the much suggested "join the party so you can be properly informed".  It isn't just limited to the PLP, it seems like all parties act in this manner.

While there was hope that Bermuda's newest party the Bermuda Democratic Alliance would be different, in this regard they seem to be taking a similar tack.  Upon commenting on the lack of information available for public consumption the overwhelming response from party supporters was that one should join to find out. Why?  Why does one need to join a party to appreciate what they stand for?  It doesn't make any sense. 

An interesting recent example is available on Bermuda is Another World where BDA's defacto representative Full Fullish claims:

Immediately after the party conference we sent out our draft constitution to ALL members for their comment and feed back before ratifing it, all members now have a very active way to not only know how the party works, but has an immediate and direct mechanism for defining those processes.  

This is excellent that they're involving their members but SmokingGun counters and hits it right on the money by claiming that such information should be publicly released if the party truly wants to make new waves in Bermuda politics:

You guys want to be different. Be different. Make it so no-one has to be a "member" before they get a complete and honest understanding of what you stand for. You want people's input, make it easy for them. Don't be afraid to operate in the open from the outset.

This outlines a major point of contention for many sitting on the sidelines with respect to the new party.  The party has been quick to claim that they represent "change" and "a better way" and fundamentally believe in transparency to their core but aren't delivering on the kinds of expectations that people hold.  Many want to see transparency reflected in not only government but also party dealings.  Now admittedly there will always be a need for a small segment of information to be kept under wraps, however every attempt should be made to make as much information as transparent as possible with secretive information being as rare and unnecessary as possible.  Information sent to an entire membership base simply doesn't need to fall under this kind of classification nor does most of the other information related to a party.

It shouldn't be much of a surprise if the legacy parties don't bother to up their transparency but it is a bit of a surprise to not be seeing the kind of change with our newest party.  Many were honestly expecting that it is what was meant by "transparency" and are frankly left disappointed.  As has been said many times on this blog in the past, what we most need to see from those in opposition is for them to be the change, not preach it.  

Embrace our roots

Salvaging Bermuda tourism comes down to embracing who we are and reinventing ourselves, not some silver bullet.  Alsys over at Bermuda Fables makes some excellent observations on the state of tourism and brilliant suggestions on just how we could return to our roots.  She suggests we remember what made us great before, why people started coming here and work to bring it back and make it even better.

One excellent suggestion Alsys makes is that we could return to a modernized version of British conservatism.  Before relying on preconceived notions of what this means consider the absolutely excellent point she makes here.  Bermuda is a very unique place unlike no other.  Our heritage is composed of a mix of British and African cultures to which we have developed our own unique culture.  Rather than try to shun one or another part of our history could we be embracing our heritage to benefit from it?  Is our success in tourism tied to that which makes us unique or by copying what everyone else does? 

A large reason why people travel is to seek out experiences different from their own.  People used to come to Bermuda because it was for many Americans a taste of British culture, mixed with sun, a short hop from the east coast and a pleasant and friendly atmosphere.  Can we remake that experience?  Further, can we do more to embrace our African roots and bind that experience into the mix?  What is it that makes us who we are?  What experiences do we have to offer that our core markets would want to come here for?  If we focus on and fully embrace who we are could we offer an experience that people would make people want to come to Bermuda?  

Hype

Increasingly Bermuda’s newest political party seems to be quite literally attempting to create what they describe as an “Obama-like movement”.  Taking a page from Obama’s election strategy playbook they’re playing heavy on inspirational hype and light on details.  Obama’s strategy counted on capturing votes of disillusioned and disenfranchising former republican supporters and it worked.  The distinction here though, is that Bermuda is not the United States.  Inspirational hype and light on details has been the Progressive Labour Party’s modus operandi for two elections now and many have grown tired of hype over substance. 

In the last couple elections we’ve seen the PLP play heavy on hype while the United Bermuda Party played heavy on details.  Hype won and details didn’t and yet in the long term, hype didn’t produce the results many were hoping for.  The new Bermuda Party may be focusing on hype with their ‘Obama-like movement’ and it may rope in many former UBP supporters who are tired of detail not producing results would it also turn off PLP supporters rather sick of hype?  There were elements of it last election when in the final stretch the PLP rolled out a raft of promises for “Free” social services to win over those not buying it.  Why would hype still be considered a winning strategy?

Bermuda isn’t the United States.  Hype worked for Obama because if he won he’d have the power to instill the ‘change’ he was promising.  Obama was racing to head up the opposition leading Democratic Party not the Constitution Party.  Hype in this instance can buy you support because you’ll have a chance to prove yourself on election.  Hype for the Constitution Party is largely irrelevant because there is less of a case you’d get the chance to back it up with results.  The new Bermuda Party is similar to the Constitution Party, they’re still rather irrelevant and unproven.

It is largely telling to watch the progress of the new Bermuda Party’s movement.  They have yet to rope in much of any of one of Bermuda’s most vocal political segments, the online blog and forum community.  Indeed, if one were to look across the internet following their recent party conference you would note that none of the prominent blogs had written anything of what happened and the only mention they received on the Bermuda is Another World forum site was who won their election and more talk about their lack of substance.   Talk and buzz otherwise has been thin and rather non existent.

The largest issue with the new Bermuda Party’s hype strategy is that they’ve still yet to clearly define themselves as much more than the UBP’s sidecar.  “Obama-like movement” notwithstanding, hype doesn’t do a whole lot to rope in disillusioned PLP supports and independents quite frankly sick of it.  Refashioning a strategy that worked in the US to apply here in Bermuda disregards the fact that we aren’t the US and represents a misunderstanding of who we truly are.  Bermuda most needs a Bermuda movement, one focused in inspiration as well as details.  One that ventures off the path of petty bickering and truly begins to involve the people as a driving force behind Bermuda politics rather than as just a tick in a box.   One that represents a significant divergence from our present political structure.  One that fights for the kind of change Bermudians are truly desperate for, the kind of change of substance that will fix our broken system and start truly dealing with our root societal problems.  Hype isn’t it.

It's not what you say but how you say it

How you say something often matters far more than what you say.  To understand why consider a photo on the wall.  In that photo there is a picture that tells a story and surrounding that picture is a frame that casts that photo in a certain context.  Regardless of the photo, a rugged wooden frame casts the picture in a different light than does a cold metallic one or one of a warm bright color.  Shapes and textures also change the perception as each frame can subtly change how we perceive the picture even though the picture may always the same.   In politics, business and in life how we frame things can dramatically affect how they’re perceived. 

The army serves as a good example of framing.  Soldiers are taught to stand and walk with a tall frame because it makes them seem stronger and more confident.  By contrast people who walk hunched over and make a habit of staring at their shoes tend to be seen as more weak and lacking confidence.  In each case your frame and how you present it is a reflection of how the world perceives you.  People often see the frame long before the picture and thus will naturally preconceive whether you’re strong or weak before even meeting you.  How you choose to present yourself, your products and your organization can all impact how they’ll be perceived.

In the past we’ve subtly covered how framing can impact how politicians are perceived.  For example, we once noted a 2007 pre-election speech in which we broke down the frequency in which Premier Brown spoke in a first vs second and third person sense.  This was but one example of where the Premier predominantly focused on speaking in first person and most often, referencing himself.  Is it this kind of phrasing or ‘framing’ that lends itself to Premier Brown being perceived by a great many people as being self interested?  Indeed if he were to primarily phrase things this way when he speaks publically would he develop such a perception?  Other than through action how else is such a perception conceived?

We can take a similar approach to how we examine the framings that make up Bermuda’s official opposition.  The United Bermuda Party allowed themselves for years to be framed as an evil white party that committed great atrocities.  Today it matters little whether these claims are based in truth for the perception is that they are.  Ultimately today how people perceive the UBP is affected by how they’ve been framed.  Each initiative they undertake and word that they speak is viewed by many from the perception that they’re an evil white party.  As former Progressive Labour Party Chairman David Burt eloquently once suggested it is important to define your opponent before they have a chance to define you.

Similarly we recently noted the framing used by Bermuda’s newest political party “The Alliance” and the risks they face by not framing themselves correctly.  In some cases their public statements are phrased in an exclusive and imposing manner.  Do they intentionally frame themselves in that way or is their intention to instead be welcoming and inclusive?  If so why slouch and look at your shoes if you want people to see you as strong and confident?  Shouldn't you stand tall?  Indeed, should they not be rushing to define themselves or risk being defined by others?

That photo on the wall translates to many things in life.  Behind that frame could be an incredible organization, product or person.  It could reflect a caring and genuine image of an individual or organization who wishes for only the best of who or what they represent.  It could truly be something overlooked and yet placed behind the wrong frame many could do just that.  They say you can’t judge a book by its cover and yet do people tend to judge a photo by its frame?  As we’ve noted, perception can be reality and ultimately does how you say something often matter far more than just what you say?

PR? Image? Perception?

The newBP sure enjoys third person phrasing.  For example, when discussing the Premier’s recent travel figures Alliance founding member and former UBP chairman Michael Fahy said:

"The Alliance is disappointed and indeed stunned at the figures released by the Government in respect of travel costs.”

Conversely when discussing recent tourism statistics current Alliance Member of Parliament Shawn Crockwell suggested:

"The Alliance supports and encourages all visitors who comes to the Island, but there must be a focused and strategic effort at encouraging more traditional air passengers to our shores,"

The issue with these two examples is that phrasing their party in this manner can create a poor perception counter to what they’re likely hoping to achieve.  “Alliance” has different connotations than “Party” and the way it’s phrased makes it seem like it is a cold oppressive and imposing organization far removed from the common man – exactly the perception the newBP is attempting to step away from.

Referring to themselves in the third person creates an ‘us vs. them’ perception that likely could drive away potential supporters and make their climb to relevance all the more difficult.  Rather than doing so the newBP may be better served rephrasing such statements to be more inclusive and welcoming.  Contrast the above statements to these simple modifications;

“Members of the Alliance are disappointed and indeed stunned at the figures released by the Government in respect of travel costs.”

How about:

“Followers of the Alliance support and encourage all visitors who come to the Island, but believe there must be a focused and strategic effort at encouraging more traditional air passengers to our shores,"

Suddenly you’ve taken very exclusive and imposing phrasing and made it sound inclusive and more welcoming.  Not only that, you boost the perception that the newBP has members and followers, increasing their perceived relevance.  Further it subversively suggests that Bermuda's newest party is about more than just the front men and that all followers or supporters of the party agree on the core value supporting tourism.  If these are the gains, why would you choose the cold and archaic sounding "The Alliance"?

See only what I want you to see

Our latest example of spin comes from today’s paper where Senator Dunkley of the United Bermuda Party where he highlights the incredible drop in visitor spending from 2007 to 2009.  Mr. Dunkley is indeed correct in his analysis however one could be forgiven for questioning why he compares against only the last two years?  Indeed, looking back to 2001 through 2006 tells a different story than the picture he paints.  That doesn’t lend itself to his argument now does it?  When tourism was on its way up, the incumbent could do little less than to spin numbers in every way possible to accentuate the job they were doing, conversely now that tourism is on its way down the opposition is taking the opportunity to spin things the other way.  Politicians.

Looking at tourism numbers there is no denying that we’ve seen significant declines since 2007 highs.  Analyzing since 2007 however doesn’t paint a complete picture.

Let’s take a look at an old chart we put together back in 2007.

Admittedly numbers are only presented for the first 3 quarters however a comparison of 2009’s $276 million vs. 2007’s $414 million in visitor expenditure paints a rather incomplete picture.  Noting the above chart we can see annual tourism expenditures and how Bermuda had a pretty poor few years from 2001-2004.   Is it not a bit ingenious disingenuous to leave such years out of your analysis and simply compare against the best recent year while leaving out the details for the previous few?  Though of course, doing so would lessen the dramatic effect now wouldn’t it?

It’s not too late

The magic about studying research like that found in How the mighty fall is that it shows us not only how to recognize where we are but what steps we need to take to keep ourselves from failing.  It takes a realization and acceptance of where you are and what got you there.  It takes the perseverance to never give up, to never give in, but to always be willing to evolve your position.  It takes a willingness to question your direction and carefully consider the questions of others.  Most importantly it takes a commitment to recognizing not only when you’re on the wrong path but when to get off it.

How the mighty fall

Jim Collin's most recent book "How the mighty fall" reads like a playbook of Bermuda's past, present and future.  It's a scarily accurate account of where we are now and where we may well be headed based upon this highly respected author's well researched investigation of the stages great organizations progress through as the go from success to failure.  Should we be heeding his warnings or ignoring them at our own peril?

Businessweek gives a good summary of How the mighty fall including the core "5 stages of decline":

STAGE 1: HUBRIS BORN OF SUCCESS

Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.

Only a few years ago people were talking like Bermudians could do anything.  If international business left we wouldn't need to worry because we're innovative and destined for success and would create replacement industries with ease.  We've always succeeded regardless of the struggle and we will again because we're a brilliant and resilient people.  While Bermudians are resilient and brilliant, did we become too entitled in thinking that we could do anything, including pushing international business around, blaming them for our problems and putting onerous requirements upon them to the point that we're seeing jobs leave?  

STAGE 2: UNDISCIPLINED PURSUIT OF MORE

Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as "success."

We've witnessed incredible growth.   More international business, more companies, more people, more revenues, more, more, more.  The problem is that we were so focused on our success we lost track of the implications of growth.  Where do we house these people?  How can our infrastructure handle it?  Can our people handle it? Can we ensure we're providing great service to our customers?  What happens to construction when all the office buildings come online and demand plummets?  We were too busy with the boom to realize we could be overheating towards bust.

STAGE 3: DENIAL OF RISK AND PERIL

In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility.

Sound familiar?  Of late we're seeing more and more negative data being spun like it's no big deal.  For the longest time we heard there was no recession, then we heard that Bermuda wouldn't be impacted.  What are we hearing now?  The data is never really that bad is it?  Our budget is just fine.  Job numbers have taken a slight decline, nothing to worry about.  Tourism is on the cusp of reaching that perennial 'platinum period' and international business has nothing bad to say in person, just ignore what they're saying behind the scenes.  The hard numbers tell a different story, but who pays attention to those?

STAGE 4: GRASPING FOR SALVATION

The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4.  Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions.'

Trips to India?  A massive new pier?  Renovate Port Royal?  Music Festival?  Love Festival?  New Hotels? Gambling?  The list goes on.  We've pursued a great many radical "game-changing" solutions at the hand of our charismatic visionary leader but how many have produced fruit?  How much have we spent vs. seen in visible returns?  Are we really saving ourselves or are we grasping for anything we can hold onto?  Are we throwing our money away on ventures that seem really great on the surface but in reality don't keep us afloat?

STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH

The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company's leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.

Our decline is intensifying as we're showing signs of being in stage 4 and prolonging it.  We're grasping for more and more silver bullets as we try to find the next big idea that will fix everything.  We're seeing how our small setbacks, expensive false starts and heavily overspent projects truly are eroding our financial strength.  Our great charismatic and visionary leader has announced many things and yet we still aren't seeing traction from most anything that yields real income vs. money spent.  We're drowning ourselves in debt and are not showing signs that we're taking the steps to save ourselves from destruction.  Will we continue to ignore the signs and fail to make the right moves until the eventual moment where Bermuda as it once was, never is again?

Jumping off a cliff?

To add to the chorus of dismay with regards to Auditor General Heather Jacobs Matthews 2008/09 Consolidated Fund report, the initial results are downright shocking and do not signal prudence at the managing of our budget over recent years.   Ms. Matthews report outlines some of our greatest fears for Bermuda as we show increasing evidence that we’ve left ourselves with little buffer if things get worse.  Even more concerning are our finance minister’s nonchalance that everything is ok and her rather meek attempts at deflecting responsibility for our runaway budget.

Undoubtedly you’ve already seen it but the Bermuda Sun’s graphic is incredibly telling.  In the last 5 years we’ve witnessed expenditures vastly outrun our revenues, deficits and debt skyrocketing with no signs of it abating.  This at a time when we’re facing the fallout of a significant local recession on top of a global one along with threats of tax changes in the US.  We simply haven’t left ourselves much in the way of a means to stay afloat if we go off the deep end.

Finance Minister Paula Cox seems to continuously rely on the “well, everyone else is doing it” argument for jumping off a cliff.  Defending her actions in a recent opinion piece Ms. Cox suggests that the comparative US and UK fiscal deficits are an adequate reason for why we can let our own deficit grow.  Ms. Cox argues:

Debt is a necessary tool in public finance. Around the world in 2009, government debt and fiscal deficits rose sharply in response to an extraordinary financial crisis and the widespread global recession.
In the U.S., the Congressional Budget Office projected the U.S. fiscal deficit to be 13 per cent of GDP in 2009. In the U.K., their fiscal deficit in 2009 was estimated at 12.4 per cent of GDP.
Indeed, the U.K. Chancellor of the Exchequer stated: "Allowing borrowing to rise - protecting services, helping people and businesses - is the right thing to do."
The fiscal deficit in Bermuda was in the range of 2.5-3.5 per cent of GDP in 2009.

The core problem with this argument is that our deficit began to grow out of control in a boom period when times were good and Ms. Cox was raving about 5 consecutive budgets where revenue outstretched expectations.  The US primarily grew its deficit over the last years due to a number of large wars, not vast overspend on capital projects.  Besides, we are a tiny island governed by completely different economics than those of superpowers.  The US and the UK have at their disposal mechanisms to adjust their debt and currency levels that we simply don’t have.  As an example, the US has taken to printing over a trillion dollars to deflate their currency thus adjusting their debt levels.  Whether or not this is a prudent move to take is debatable but ultimately they have a diverse economy that allows them to take to these forms of quantitative easing in hopes of stimulating the economy.   We don’t.

We’ve already expressed concerns at the ratio of local Bermudian $ borrowing versus savings and since we did so, the ratio has continued to climb.  We can note the latest regulatory update from the Bermuda Monetary Authority shows that we’ve become even more reliant on foreign borrowing to sustain ourselves and this is without even considering the borrowing our government is doing. 

We are increasingly reliant on borrowing foreign money to sustain ourselves and despite arguments that we’ve invested in infrastructure with our debt, the reality is that in a great many cases we vastly overpaid for that investment.  Would you readily pay me $2 for a regular $1 coin?  Likely not as you’d end up with something worth half as much as you paid for it.  So why do we think overpaying for Berkeley, the new cruise ship pier and the Port Royal renovations are good value for the added debt we’ve undertaken?  The worst part is that not only does the list of overspend go on but here is how our Finance Minister justifies it:

The Minister of Finance operates as a cog in the wheel. My role is to add value and to provide input on fiscal positions taken in various ministries. I can indicate support or objection. However the sponsoring minister(s) knows that I cannot overrule their request unless I have others who join with me to support and uphold my position.

Individual Ministers are 'finance directors' in their own right and have a responsibility to keep a keen eye on how their senior officials manage their budgets and projects.

In addition, there is an accountability framework that includes the office of the Accountant-General's Department, the Office of the Auditor-General, the Office of Internal Audit, and the Ministry of Finance HQ.

There we have it, the ‘Finance’ Minister has no power in actually managing finances and admits to no accountability for overspend.  The Minister of Public Safety is willing to take such a stance that he’ll resign to uphold his position while the Minister of Finance is “Politically neutered”.  But hey, we shouldn’t worry as the Office of Auditor General, you know likely the only department to actually have its budget restricted, office space contained and it’s head arrested twice, is part of the ‘accountability framework’.  

In the end, Ms. Cox is probably right that we should simply go along with it because everyone else is doing it, who knows, perhaps in 3 years we’ll be looking back at the musings of this “irresponsible and biased writer” to realize that everything said above was nonsense and completely wrong.  In the meantime it’d likely be wise to heed the wisdom of Gary Larson and always be sure you have a way out before following the herd of lemmings jumping off a cliff.

Encouraging alternatives to marijuana

So again we return to the whole marijuana crackdown debate.  We’ve already covered facts, fiction and a bit of history behind the drug and it’s prohibition along with a discussion on its implications on crime and gang activities, so there’s no need to rehash those arguments here.  What we can cover is a bit on the psychological addiction of marijuana, the implications that our policy and stance against it have on our society and ultimately the reasons why we should be focusing on encouraging alternatives rather than removing them.

Marijuana has not been proven to be physically addictive but has been shown to be psychologically addictive.  To understand the implications of psychological addiction one only needs to look around in our society.  Fatty food and fine sugars are not considered physically addictive and yet the effects of psychological addiction are readily apparent when one simply looks at our society’s extreme prevalence of obesity, heart disease and diabetes.  Quitting a long time habit of overindulgence is about as easy as quitting smoking cigarettes.  It isn’t something that happens overnight but instead is a grueling and arduous process of commitment to an ideal, self restraint and will power.  Usually it can’t be done without help and fighting relapse is a lifelong struggle if you don’t maintain a healthy active lifestyle.  In moderation fatty food and fine sugars can be a nice treat but in excess they can be one of our worst enemies.  Similar moderation is essential in all facets in life.

Fatty food and fine sugars are damaging to and represent a considerable tax on our society and yet we leave people to their own devices, free to abuse them.  Why?  How would society react if we were to enact laws against sugar and fatty food consumption?  If tasty meals and deserts were restricted?  If we were to enact regular testing denying jobs and access to activities on the basis of blood sugar and cholesterol levels?  Certainly it would be better for our health but ultimately it would rope in so many victims of psychological addiction that we’d simply further balloon our prison population with people barely capable of helping themselves stay away from it.  These individuals wouldn’t simply wake up one day, realize it’s illegal and never touch another powered donut.  The temptation is simply too great if you use food as a crutch to help yourself manage through life.  Marijuana is little different.  In moderation it can be as unhealthy as those fatty foods and fine sugars and yet in excess it can be just like those foods in that it can be a debilitating crutch that keeps people from living a healthy and productive life.  You can’t simply say today we’re cracking down and expect every user to readily stop using, it just doesn’t work like that.

Despite the well known wide prevalence of marijuana use in our society we seem to think that our approach can be different, that use can be turned off like a light switch.  We seem to believe that keeping it illegal and cracking down heavily is the answer and that people will kick their habit just like that.  Nothing in life is that easy and yet we keep acting like it is.  There is a great crusade of anti-marijuana campaigners out there who aim to ensure that you can’t have a steady job, you can’t get involved in sports, you can’t have a life if you partake in marijuana smoking.  It is a sure fire lose-lose approach.  Imagine if tomorrow we made fine sugars and fatty foods illegal and embarked on a similar campaign.  Guaranteed a large segment of our society would not only avoid giving up their habit, they would fall deeper into it for lack of alternatives to using.  Why do we think marijuana is any different than these unhealthy foods?

Saying that because someone uses marijuana they can’t partake in local sports robs them of legitimate alternatives to lighting up.  We need to be focusing on encouraging abusers to seek healthy alternatives rather than advocating that there is no alternative.  Similarly with the crackdown on job opportunities.  By unnecessarily enforcing drug testing and ensuring that marijuana smokers cannot obtain steady jobs we guarantee that a large segment are pushed further and further into a life of crime.  Again, imagine if we did this for fatty foods and sugars.  What do you honestly believe would happen if tomorrow people were banned from sports and holding steady jobs if their blood sugar and cholesterol counts were too high?   Do you honestly believe the now jobless and alternative restricted over indulgers are going to suddenly drop their crutch and stop eating the wrong foods?  Is it more likely they’d only end up more likely to lean on their crutch to get through these rougher times?

Our approach to combating over indulgence of unhealthy foods is to test regularly as a guideline rather than a rule, advise of the risks, educate and work together to encourage people to choose a more healthy and active lifestyle.  Perhaps it is not successful in all cases but gradually through various community programs, education initiatives and genuine commitment by our society to improve our health we’re seeing better results as we understand the implications of an unhealthy lifestyle and addiction to unhealthy eating.  Is this approach a better alternative to criminalizing all sweets and fatty foods to save people from themselves?  If so, why do we feel it is necessary to take two different approaches with similar forms of substance abuse?    Perhaps it’s time we rethink our approach and devise more ways to encourage people to choose a healthier and more active lifestyle rather than ensure that they don't have a choice.