The problem with Casinogate

In Bob Richard’s last public interview he suggested that the public doesn’t know the full story behind the Jetgate scandal.

Mr Cannonier sensationally resigned in May 2014, to be replaced by Michael Dunkley, after being involved in the Jetgate controversy along with Cabinet colleagues Mark Pettingill and Shawn Crockwell.

 

Mr Richards would not divulge the full story behind the scandal, but told The Royal Gazette: “The public doesn’t know what happened. Craig was made to be the fall guy.”

This is a problem for the OBA that they simply just don’t get.  They don’t have the trust of the public.  They gain nothing trying to point fingers at the PLP for Casinogate while they have no actual evidence of any wrongdoing. If anything, it damages their cause.

The optics of trying to make a huge deal out of “Casinogate” are at the moment terrible and unlikely winning them any support.  Was there a trip?  It certainly looks like there was.  Is there any evidence that money or bribes were taken in exchange for future concessions?  At the moment, no.  Is there any evidence of any unsavory actions?  At the moment, no.  There is seemingly no evidence that it was anything more than a trip.  Is there more to it, there sure could be, but at the moment there is no evidence.

Many OBA supporters are up in arms.  The OBA should attack the PLP with the same fervor as the PLP attacked the OBA with regards to Jetgate.  The problem with that reasoning is that when the former Deputy Premier and Finance Minister comes out and says that there was more to their own scandal that hasn’t been revealed then it leaves people with a bad taste in their mouth.  The OBA needs to clean out their own skeletons before focusing on the PLP’s.

Let’s talk about the state of the economy

The economy is not as good as some would have you believe.

The OBA’s “recovery” was largely stimulus driven. In layman’s terms this means it was mostly temporary.  Growth was driven by the projects like the America’s Cup, hotel construction, the airport and other temporary projects.  This means that as America’s Cup ended, so did the stimulus it brought.  The airport and hotel projects are helping keep things going, but we haven’t seen a real recovery in terms of job growth in industries that drive the foreign income we are desperately reliant on.

Seriously, let’s look at the state of job creation over the last few years.

Let’s filter this down to the core areas that have shown growth over the last couple years:

The only industries that supply much needed foreign income and economic growth locally are under represented.  International business has barely seen a bump, same with financial intermediation.  Business services is the only area that has seen reasonable growth.  The rest of the areas showing growth are local services like restaurants that could suffer as the temporary stimulus eases off.  Other sectors are flat-lining or in decline.

The problem we face is that we haven’t seen real growth.  The America’s Cup brought a whole bunch of long term tourists to the island who have now left, taking their on island spending with them.  Hotel projects provide a temporary boost to construction but likely won’t result in tremendous amounts of jobs.  The airport project will help, however the fate of it is uncertain.  We’re still waiting to see the full details of the deal released so we can find out truly how bad of a deal it was and what will be done about it.

We’re not in a good position right now.  There’s lots of talk of creating new industries, diversification and creating tech hubs.  This is great in theory, however we’re competing with the rest of the world on these things.  Trust me, competing on global scale is incredibly difficult, especially when your competitors have far better resources and a much larger market than you do. Nearly every place on the planet is trying to create tech hubs.  So how can we possibly be competitive as an extremely high cost destination that is a difficult and painful place to do business?  That needs to change and unfortunately change is incredibly difficult.  In order to be successful we need all hands on deck, the entire island united behind making ourselves competitive to attract new industries and create new jobs.

This is why distracting ourselves with independence or trying to force through discrimination against gay marriage are so risky and get people worked up.  Right now it is the absolute worst thing we can do as we are in such a fragile state we need to be incredibly focused on the task at hand.  Any risk of disrupting business confidence in the stability of our island can have devastating impacts on our ability to grow and could put us into further decline.  No business will want to come here to help us diversify if they have doubts about our stability.  Worse, we’ll continue to be divided as an island fighting against each other rather than united in progressing ourselves back towards prosperity. Thus it is incredibly important that our new government takes swift action to immediately put to rest any concerns that arise like independence and resolve issues like gay marriage in an amicable fashion.  Our economy is simply too fragile.  It is likely quite a bit worse off than you’ve been led to believe and we need to do everything we can to avoid the risk of making it a lot worse.

Quick thoughts on the Bernews interview with the Premier

Interesting interview with the Premier. Very articulate and composed responses to good interviewing. It seemed like he avoided providing personal opinions in most cases and deferred decisions to the appropriate committees and bodies that will be setup. I look positively on this as it suggests his intent to lead by enabling decision making rather than dictating specific decisions.

Good that he pledges to stick to the OBA’s budget. Also good that he suggests any unbudgeted spending will need approval and will be publicized. Interesting that he avoids admitting what areas will see cuts. Encouraging remarks regarding commitments to balancing the budget.

I think growth will be alot harder of a task than is being suggested. As Jeremy Deacon suggests, there will likely be a time lag and no clear answer was given of how it will be achieved within the timeframe, only that they will live up to their commitment to balance the budget without details on how.

Encouraging answer on independence. Wish he’d come out immediately after Senator Hayward’s speech and said exactly that.

I tend to agree that the OBA did not take a position on same sex marriage. They abstained from challenging the rulings but did not take a firm position.

Very interesting remarks regarding the company formed with ties to AECON, will be interested in hearing more as it becomes available.

It will be very important that the government is transparent as possible when it comes to any contract reviews and changes.

Great question with regards to the definition of a living wage. Can’t say I’m surprised with the response as I don’t think it has really been defined and the Premier is best avoiding the definition and letting their committee determine the most feasible solution given our circumstances. Such as what Craig Simmons had to say regarding it.  I would rather see us take a pragmatic approach than force through an unrealistic one.

Unfortunately much of the commentary in the Bernews live feed was disappointing in that they attacked the interviewer vs. evaluated what was being said and the responses provided.

Would the PLP intentionally trigger a constitutional crisis and use it to further the cause of independence?

Today’s Royal Gazette has a great editorial on the present conundrum we face regarding same sex marriage.  We risk the government causing a constitutional crisis by trying to push through a law that could violate the UK’s responsibilities to uphold human rights.  If the UK denies the law royal assent, that could be used as a basis to argue for independence.  Would it?  No one is certain, but it is a possibility.

There is a lot of speculation regarding this issue however it does align with what I’ve been wondering over the last few days.  Triggering a constitutional crisis with the UK alone could be disastrous for economic confidence and rapidly tank our economy. Using that as an argument for independence could make things even worse.  The thing I really don’t get is whether this issue is wholly avoidable?

It would seem to me that the fix is to

  1. Adjust the law along what the PLP pledged in their platform to allow for civil unions and protect against discrimination
  2. Adjust the law to remove the right to marriage

What am I missing here?  It would seem that going straight to #2 would cause a constitutional crisis but going to step #1 then step #2 would not.

I’m certainly no expert in law or constitutional matters so I assume it can’t be that easy. Perhaps someone more informed can explain why this route is not an option?  At the moment it seems to make a whole lot more sense than unnecessarily causing a constitutional crisis and risking tanking our economy.

Independence? Why now? What about critical issues like education, crime and jobs?

Senator Hayward represents and speaks for the government when he calls for independence.  As a union leader he didn’t, however as a senator he most certainly does.  By calling for independence in his labour day speech he has effectively put independence on the table for the government, at least unless the government immediately provides clarification.  The timing couldn’t be worse as it risks stalling and disrupting our recovery.  Why bring up independence now when we’ve got quite a few more pressing issues to deal with?  The PLP have all the power they need to tackle our islands problems. Why are they now suggesting that it isn’t enough?

Contrary to what many may believe, Bermuda’s economy hasn’t recovered.  It has been propped up by “stimulus”, temporary projects that create jobs and encourage spending. Yes, new hotels are being developed, the airport project is underway (for now) and America’s Cup happened.  These are all temporary and provide limited lasting effect in terms of jobs and growth.  We haven’t seen signs of sustained real growth, especially since our core driver, international business, has not been adding jobs in significant numbers.  We honestly haven’t properly recovered from our recession and too few really understand this.

Now is a horrible time to bring up independence.  It creates uncertainty about our political future.  Businesses hate uncertainty and they’re unlikely to grow if there’s uncertainty.  Businesses don’t really care who is in government, they care about how government actions affect them or could affect them. Independence raises a tremendous unknown on top of a significant number of existing concerns.  It creates uncertainty and instability that can cause potential inventors to reconsider investing in our island and businesses, rethink plans to continue investing or worse, make plans to remove investments. All one needs to do is look at what Brexit is doing to the UK in order to have an idea of the damage that can be done by political uncertainty.

The PLP are not in a position to offer a credible outlook for a successful post independent Bermuda. To be frank, they have a terrible track record in government from a financial perspective and there are many unresolved allegations of unsavory actions and evidence of poor governance.  The early steps of the government are suggesting that they don’t seem very interested in acknowledging their mistakes, holding people accountable and showcasing that they are a new and different party that has learned from their actions.  Nothing of this establishes confidence that an independent PLP governed Bermuda will be a more successful and business friendly Bermuda.

Touting independence as a means to “remove ourselves from colonial rule” and “set our own agenda” when we are already predominantly self governing and control most aspects of our agenda is short sighted.  Yes, there are valid cases at which we should consider independence, such as if our economic well being is threatened by remaining a part of the UK.  However, independence for sentimental value will not offer improvements and will come at considerable cost.  Really, the core things we gain are control over foreign affairs, the military, police and judiciary.  Why do we need direct control over any of these things?  Why do we want our government, no matter who is in power, to be given that much power? There may be a time to have that discussion and pursue independence however now is not a good time.

Let’s remember the issues at hand.  Independence won’t fix education.  Independence won’t solve crime or eliminate gangs.  Independence won’t fix our economy.  Independence won’t eliminate our debt or NANCI.  Independence won’t create jobs.  So, with all these urgent issues needing attention, why would we distract ourselves with independence?  Yes, it may remove the final vestige of colonial rule but will it really change any of our urgent issues? The PLP need to be focused on getting our house in order and delivering on their election promises long before considering independence.

Needing independence “so we can set our own agenda, so we can create our own system and so we can see our people get ahead” when the PLP already have full control over all of these things reads like an excuse.  There are critical issues that need to be addressed.  We need to get our economy back on track.  We need to fix education.  We need to address crime, gangs and violence.  We need to balance our budget.  We need to create jobs.  These are all very immense and challenging tasks that won’t be easy.  Raising the prospect of independence now with the reasoning that the PLP doesn’t have enough control sounds a lot like the PLP are lining up excuses for not being able to deliver on their promises.