The OBA’s failure to communicate on Pathways to Status

Former Finance Minister Bob Richards had to say in yesterday’s paper.

“It was clear to me as the economics guy that what we were proposing for immigration was very sound economics.

Here’s the problem.  The OBA completely and utterly failed to explain how their immigration proposals were sound economically and how they would benefit the average Bermudian.  They had tunnel vision and were only capable of viewing and explaining issues from their own perspective.  This versus trying to put themselves in the shoes of the average Bermudian to better understand and explain how this would benefit them.  This was one of the fundamental flaws of the OBA’s communication strategy and why they were consistently described as out of touch.

The OBA was wholly accepted as very strong economically.  The problem was, few people really understood how or why and they didn’t help themselves by explaining it. For example, nowhere in the former government’s communications regarding pathways to status did I see a coherent explanation of it’s economic benefits.  The following was closest and it wasn’t very compelling:

New applications will represent a revenue-enhancing opportunity as applicants pay the substantial fees involved under the legislation. New Bermudians, with their newfound security, could seek to purchase real estate or inject capital into Bermuda companies as directors and shareholders. Assets which will be earmarked to leave Bermuda will be more readily available for investments in the local economy. These contribute to an economic multiplier effect and feeds back into positive movement in Bermuda balance of payments and increased Government revenue.

It reads like we were putting status up for sale.  How does this benefit the average Bermudian?  Why would we want to openly sell Bermudian status?  It wasn’t encouraging from most any perspective.  Looking at the rest of the argument for pathways to status it wasn’t much more encouraging.  It was “the right thing to do”. Our policy wasn’t not consistent with international human rights and Bermuda is the only country not to have it.

Here’s the problem.  The framing was all wrong.  How you present an idea is very important as it steers the perceptions and how people feel about that idea. How people feel about an idea can often be more important than the idea itself. People, especially in a time of recession, care more about their own basic needs long before they care about ‘the right thing to do’ for non-Bermudians.  If you can’t explain how Bermudians will benefit, people will not only reject the idea, they’ll get annoyed that this is your focus vs things that are perceived to actually benefit Bermudians.  Thus, that is what we saw happen.

Worrying about basics like how you’ll buy food, how you’ll pay rent, the health and welfare of your loved ones are far more important priorities than whether or not we’re doing the right thing on behalf of our expat community.  People ask themselves “why should I care?”, “what will this do to benefit me and my family?”. The big problem with the OBA’s communication was that they failed to provide good answers to these question on most issues.

Certainly there were valid economic reasons to be made, however they simply weren’t elevated enough.  For example, one of the big issues we face is that jobs in international business, the core driver of foreign income for our island, have not really grown over the last few years.  This is a huge problem that far too few people really understand and hasn’t been explained very well.

Policies like term limits and the global recession contributed to a decline in IB jobs that simply haven’t recovered.  We aren’t growing jobs and risk losing more.  One of the big problems we face are situations where long term residents such as senior IB staff and Executives consider relocating off island and taking jobs with them.  I’ve met numerous senior IB individuals who lament that their children cannot work on island at age 16, may have been born and raised here and really only know the island.  It is just as easy to say “well, you knew that coming here” as it is “well, I’m going to relocate somewhere else and take my entire department of Bermudian and non-Bermudian jobs with me”. This is the crux of it.  We can’t have our cake and eat it too.

Everyone agrees we need jobs and yet nowhere in the entire Pathways to Status saga did I hear arguments of how it would held protect and help create jobs.  There were no explanations of how it would benefit the average Bermudian to support it so why would anyone have done so.  “The right thing to do” is a completely different argument than “it will protect and create jobs”.  Yet, the OBA never took the time to frame things properly from the context of the average Bermudian and as such allowed the issue to be framed as manipulation of the populace to boost their voter base.  It is a perfect example of why the OBA was seen as out of touch.  They did not take the time to view and explain their proposals from the perspective of the average Bermudian.

 

Why are you desperate to prove the America’s Cup event was a failure?

The Bermuda Tourism Authority today released statistics covering the America’s Cup period and people are already up in arms trying to prove America’s Cup was a failure because it didn’t live up to the hype.  Why?

The America’s cup was to be so big that all the hotel rooms would be full and there’d be so much demand that they’d need to bring in a chartered cruise ships to host all the extra people.

One word:  Hype.  If you believe the above, you were sold on hype, not reality.

Smart financial decisions are not based upon hype.  They are based upon conservative projections of a return on investment. America’s Cup was not brought here because of hype, it was brought here because conservative projections suggested it was a good investment.

What we really need to do is take a step back and compare the results that we’re seeing against the projections to prove if the investment was worth it. The conservative projections suggested that based upon the invested amount we would generate $235 million of direct spend on the island.  We need to figure out if the returns generated met or exceeded that estimate.  If you expected it to bring the second coming of Jesus then I can only shake my head that you bought into such hype and suggest you’re reading the wrong blog.

Yes, hotel occupancy was down for June.

Yes, the original projection suggested hotel occupancy to be 10% higher

Does that make it a failure?  Well no. It was a projection.

You see, the government has no control over how Hoteliers run their businesses.  If hotels decide that they want to push their prices up to keep occupancy levels the same, government can’t do anything about that.  It is a business decision on the part of hoteliers.

So, what we saw was room prices being $133 more expensive on average in June than they were during the same period in 2016 while occupancy was slightly down.  What does that mean?  Well if you look at it from the perspective of bed nights (you know, nights that a hotel bed had someone in it), there were nearly 98,000 bed nights for June which was down from 107,055 for 2016.  However, if you consider that each one of those bed nights cost $133 more on average, then by a rough back of the envelope calculation we’re looking at about $13 million in additional revenue.  Assume that the 10k less bed nights accounted for a guess of about $300 a night on average in 2016 and we can subtract $3 million from that number.  So, for hotels that’s about $10 million in extra revenue.

So, look back up at the assumption snapshot above and you’ll note that $5.485 million was the projection.  If for June we honestly cleared $10 million in revenue (not counting May) then it suggests the event beat the projection.

How about Superyachts?  The original estimate?  40.  The final number? 100.  So that is looking positive as well but we won’t have good estimates of what they spent until the impact assessment comes out in October.

 

 

Cruise visitors?  This is an area that raises perfectly reasonable questions.  The projection called for 3,850 static cruise ship passengers though admittedly a caveat was included that this plan could change.  Ultimately $18 million was the estimated direct spend so we can work with that as it forms part of the $234 million total.  The question is, compared to the estimate, how did cruise do in spending?  To be honest, I have no idea.  The America’s Cup summary of the tourism statistics suggests there were roughly 13,000 additional cruise visitors.  The problem is that the statistics numbers provided are weak so it is very difficult to put together an idea of whether or not cruise measured up.  No cruise nights are listed, no expenditure is listed, so there’s really no good way to compare the cruise projections to the actual results at this point.  So I’m left suspect of the cruise number and will wait to see if more info is released to help clarify the numbers.

So.  Was the America’s Cup event a complete failure overall?  It isn’t looking like it. Was it a wild unbridled success that yielded the second coming of Jesus?  Well no, it doesn’t look like that either.  Did it likely meet and possible surpass the original projections?  Probably, but we won’t know for certain until the impact assessment comes out in October.

Here’s the thing.  If you’re desperate to prove the America’s Cup is a failure without fairly looking at the original projections and the actual results then I have to question whether you actually care about Bermuda’s future.  Great if you were so caught up in the hype of the election that you wanted your team to win over the other.  If your team won, great.  If your team lost, too bad.  Either way, take a step back, recognize someone won, and deal with that is the way it is going to be for the next few years.  Given that it’s over, isn’t it time we step back from the hype and cheerleading and rationally focus on a better Bermuda?  A first step would be to stop trying to prove the outcome you wanted and instead taking a serious look at the stories the facts are telling.

Before worrying about price controls, start with Unit Pricing

There’s a debate on “MAJ’s list” on facebook regarding the high prices of items in one grocery store over another.  It highlights a key thing I wish we’d see the government introduce: legislated unit pricing on price labels.

Here’s a great example thanks to a quick google search.

Many countries legislate unit pricing as a means to make it easier to compare products. Bermuda unfortunately is like the wild west.  Some things have a per unit price, others don’t. Usually they aren’t listed on the pricing label.

For example, look at frozen chicken in marketplace. They have numerous different brands, all with different quantities for different prices but no easy way to compare price per lb/kg. I usually have to take out my phone and do it manually. If you’re really lucky you get to shop in Supermart in St. Georges where most things have no price labels at all.

How is anyone supposed to be price conscious and hold stores accountable when it is very difficult to compare prices?

Why were the polls so wrong?

Here’s my regular chart updated with the election results (I’ve omitted the July 15th polls because it makes it hard to view because of the extreme jump between July 15th and the election results)

How did the PLP storm to victory and take the majority of the popular vote when the OBA were leading in the polls?  Certainly polls aren’t 100% accurate.  They’re completely reliant on getting enough random people to answer to get a good approximation of the overall electorate.  If you only focus on a certain segment, it can skew the results.  However, I still think the polls were reasonably valid and what we witnessed was a significant shift in support and a solidifying of the undecideds rather than a case of the polls being wildly inaccurate.  It is clear from the chart above that the OBA lost support and the undecided swing vote ultimately rallied behind the PLP.

I think the significant lead in the polls was a disadvantage for the OBA because it led to:

  • A decrease in turnout of supporters to vote because they think a win will occur
  • A shifting of votes of reluctant potential supporters who didn’t want them to win with a large majority to send a message that they are not happy and the party didn’t do enough
  • An energizing force for the opposition to turn out strong

In my personal opinion, many reluctantly supported the OBA in the lead up to the election for economic reasons but wanted to send a message to the OBA that they hadn’t delivered on most everything else. When the polls were showing a strong victory for the OBA people began to fear that it would give the OBA too much confidence.  They were already too overconfident in government despite having barely won the 2012 election.  They forgot that fact and governed from an ivory tower as if they’d won with a significant majority rather than a shoestring.  Eg:

“This Government was elected with a mandate to solve Bermuda’s very serious challenges”.  – Attorney-General Trevor Moniz

I doubt many wanted to see the OBA win with a significant majority so it wasn’t surprising to see a shift to the PLP to reduce margins.  The OBA didn’t help themselves with their governance or their campaign so seeing a landslide shift in support from undecideds wasn’t terribly surprising either.

It can’t however be said the PLP stumbled into victory.  The swing vote clearly rallied behind the PLP likely because the the PLP ran a strong campaign.  They telegraphed their vision long before the election and filled in many details with their platform. Their platform was frankly impressive and had quite a few good ideas. As to whether or not it will be feasible is a whole other discussion, but they certainly get credit for effort, ideas and clearly listening to the people.

The OBA’s platform, by contrast, was weak, lacked ideas and showed evidence that they might listen but haven’t heard what the people have been saying.  Based upon an analysis of platforms alone the PLP was a much stronger contender.  The PLP was also on the ground and rallying support in a way that the OBA haven’t managed.  Did the PLP take the “high road”?  Absolutely not, however I frankly doubt anyone expected them to. It is concerning that there was such overwhelming endorsement of such a divisive campaign for, as noted by the Cayman Compass in their concerning post election editorial, the PLP’s campaign and actions as opposition are concerning evidence of how the PLP could ultimately govern.

Did voters believe (or care if) the PLP’s modus operandi has changed since the party last was in power – indebtedness, divisiveness and short-sighted “us vs. them” political rhetoric? Even as an opposition party, the PLP attempted to obstruct progress at every turn by flexing their union muscle. They certainly shouldn’t be expected to govern any differently.

The thing is, the OBA went in with a lead and blew it with a terrible campaign.  The OBA might complain that they were held to a higher standard than the PLP but really that’s what they campaigned to be in 2012, something new and different, a new kind of politics for Bermuda.  They set their own benchmark and yet resorted to cheap tactics that I’m certain turned people off. They showed the people they didn’t believe enough in their own record and plans for the future.  Instead they didn’t focus on that and took the low road.

Having the Premier of our country post things like this are embarrassing.

Let’s be clear, converting this

 into this  is not “taking the high road”.  It was cheap and petty.  I can’t imagine who thought this was a good idea and would actually win them support.  There were a whole raft of posts like this, not from random ads or mysterious facebook pages and groups but from the Premier himself.  Further a whole debate could be had with regards to the sensationalizing of various PLP proposals.  Certainly one could have questioned the feasibility of some of the ideas but in many cases it came across as intentionally misleading rather than an honest and frank discussion of the merits of the proposals.

The OBA focused too much on highlighting and distorting the PLP’s proposals and not enough on their own.  All that did is highlight how empty their platform was of real solutions and ideas.  The OBA’s section on the economy, their supposed greatest strength in governance, was minimal and contained no real proposals for reigniting growth.  They attacked the PLP’s proposals for tax reform and yet sidestepped their own previous proposals for tax reform which were conspicuously absent.  How were they going to balance the budget?  Their platform lacked answers much like it lacked ideas and vision. There was nothing to get people excited about another 5 years of an OBA government.  So why would people support them?  As government, campaigning as “not the PLP” wasn’t good enough.

So, were the polls wrong or did the OBA bungle things so badly the swing vote rebelled against them?  In my personal opinion it was more of the latter than the former.  It couldn’t be said that the OBA wholly handed the PLP a victory given the effort the PLP put into the campaign.  However, as I noted in my interview with the paper, the divisiveness of the election has likely damaged our island and voters are the real losers.  The tone and path of our local politics have been a tremendous disappointment leaving me questioning what kind of future we have as an island so divided.  As in the numerous other cases over the last 10+ years I’m left wondering the point of it all and if it is perhaps time to take a permanent break from blogging.

None the less, congratulations are in order to Premier Burt and the PLP for winning the election. Hopefully they will succeed in delivering a great future for Bermuda and manage to repair some of the divide that paralyzes us.

In case you’re wondering, I didn’t vote this election.  For personal reasons I was off island from before the election was called and was unable to return in time for the election.

Real reform is desperately needed to return focus to the issues

When The Royal Gazette contacted me last week regarding commentary on the election campaign I figured sure, I can provide some filler content on a slow news day.  I threw something together based upon my earlier post (Bermuda Election 2017: Big on slogans, short on solutions) and submitted it on Thursday.  Nowhere in my wildest imagination did I expect to be featured on the front page, referred to as some sort of expert while overshadowing the OBA’s election platform announcement.  To be honest I am wholly taken aback.  I am certainly by no means an expert and am just someone on the sidelines commentating on the match.  It is shocking to consider what the implications are when the editor thinks the ramblings of a no-name blogger about our broken political system are more interesting than the OBA’s platform?  The thought is perplexing.

The overarching concern that I tried to express in my comments is that our political system no longer serves the people because politicians are discouraged from pursuing real reform.  All indications are thus far that both parties are wholly unprepared for this election, lack tangible solutions and are afraid of the people. Instead of working with the people they try to be as vague as possible in the run up to the election and at the last minute make some big unsubstantiated promises to try to win support.  It’s a recurring theme that is getting worse with each election.  In the meantime, many people who could participate stay on the sidelines as our political system renders a 3rd party or independent candidates impossible.

People seem to forget that in the run up to the 2012 election the OBA wasn’t geared up to win by a landslide, it was a very close race.  They produced a platform which presented a feel good promise of inclusiveness but lacked real substance, real measurable deliverables.  When the OBA realized it wasn’t going to win them the election they trotted out the promise that they would deliver 2000 jobs.  It wasn’t qualified what they meant by it but it is what the people wanted to hear and tipped the election in their favor.  The OBA didn’t explain that things like Americas Cup, the airport deal and pathways to status were the price to be paid to create jobs. Once the election was over people didn’t want to hear it, 2000 magical jobs were promised with no expectation of sacrifice.  The OBA in the end are paying the price for not having set expectations and failing to deliver.

People also forget that the 2007 election was the same in favor of the PLP.  It was pre-recession, the economy was overheating and people were being priced out of living in Bermuda.  The PLP weren’t set to win the election by a landslide.  So, 10 days before the election, they rolled out a platform littered with the word free.  Free day care.  Free public transport.  Interest free loans.  Free Bermuda college.  Free computers and dental coverage for seniors.  Nothing in life is free.  What we discovered was that not only were most of these promises not feasible, it was the taxpayer that was footing this bill in the form of millions in deficits and billions in debt.

This is ultimately the problem.  We want our politicians to do the impossible, fix things without changing anything or us having to make any sacrifices.  They sell us on grand unrealistic promises at the last minute and this is what we vote for.  We don’t want real reform.  We lament that capable people sit on the sidelines and don’t get involved but we don’t want to demand any kind of real change to enable them.  Our two party system ensures that independents or are third party simply aren’t viable.  We won’t see real change until we can convince our politicians that they won’t get elected until they reform our political system to make other parties and independents viable.  The problem is, politicians will never pledge to give up power unless they think it is the only way they can win the election.  Perhaps we can convince one of the parties that this year’s last minute pledge to tip the scales should be realistic political reform.

 

Full commentary regarding the election

Last week The Royal Gazette asked if I would answer a few questions regarding the election campaigns thus far.  Here is a copy of my full responses to a set of four questions they posed that delve a bit deeper than the portions selected for publication.

From what you have seen, what do you think of the OBA and PLP’s election campaigns so far?

Each campaign has been heavy on rhetoric and slogans but short on substance.  Neither has proposed tangible solutions to our predicament and are more focused on trying to discredit the other.

 

The OBA is touting their slow and steady track record but they lack discussion of new plans and new ideas.  Their slogan of “Forward together, not back” rings hollow as they have not lived up to being the inclusive party they campaigned they’d be in the last election.  It leaves one wondering who they mean when they say ‘together’?  How can we be certain that a future OBA government will move all Bermudians forward together?

 

The PLP are touting their Vision 2025 which is big on ideas but short on plans on how to actually achieve them.  They claim they are “standing strong, putting Bermudians first”, but we have witnessed the PLP putting political expediency over what will truly put Bermudians first.  Often times one gets the sense that their version of “Bermudian” only considers one segment of the population and not all Bermudians.  How can we be certain the PLP will stand strong for and put all Bermudians first?

 

Sadly thus far both campaigns have been wholly disappointing in their finger pounting and rhetoric compared to their lack of focus on solutions to the issues.  You would think we are gearing up for a football match between small town rivals rather than deciding our future.

 

Do you think voters have been given enough information about how either party would handle issues such as the economy, crime, education or social issues?

Voters seem to be given as little information as possible to allow politicians to avoid accountability on complex issues. Neither party have track records of great success because governance has become increasingly difficult thanks to the recession and the internet.  Politicians avoid admitting when they failed, they just spin it making feel good party statements, touting quick fixes and focusing attention on the failures of their opponent. We need real reform but the people don’t want to hear that. So the politicians tell us what we want to hear or avoid telling us as much as they can.

 

Our economy is broken, we’re deep in debt and there are no silver bullets. Both parties avoid admitting that we’ve become an expensive and difficult place to do business that struggles to be competitive. Countries like France under newly elected President Macron have realized the importance of reform to revitalize the economy.  Countries like the  US and the UK have fooled themselves with bold populist promises that struggle to match expectations.  Reform and accountability are necessary to revitalize our economy but neither party wants to admit it because it would not be easy or popular.

 

Our children’s future has become a political football.  Neither party has succeeded in fixing education.  Neither admits why they failed to fix it, what they learned and what they’d do differently.  We spend more money per public student than the fees are for private school.  The problem isn’t money.  Every time either government has attempted to make hard choices the people have opposed it.  We want our politicians to do the impossible, fix education without changing anything.

 

Crime is another complex problem neither has succeeded in solving.  We did not provide opportunity and support to a segment of our population so we are seeing the result when they create opportunity and support for themselves.  Fixing that in the long term requires fixing other issues like jobs and education.  Addressing crime today requires taking a hard look at how we respond to it and how it is funded. A hard line approach has not worked but conservative Bermudians are not willing to consider alternatives.  So politicians do all they can to kick the can down the road.

There is a growing divide between the haves and the have-nots which drives discontent.  There is a temptation for politicians to stir nationalistic and populist sentiment for political gain.  It is easy to point to the divide between rich non-Bermudians and poor Bermudians to sensationalize the divide of prosperity between white and black.  We can demonize foreigners who come here as the problem and make them feel unwelcome but driving out foreign wealth will not fix anything and will make everyone poorer.  What we really need is a hard look at only the divide between Bermudians.  We need to understand how this divide is growing and what we can do to reverse it.  We need to reform policies that only benefit wealthy Bermudians and evaluate how those policies negatively impact the average Bermudian.  Just as one party aims to leverage non-Bermudian wealth to drive the divide between us, the other doesn’t do enough to acknowledge the true divide between Bermudians.

 

Ultimately the people aren’t offered real solutions because we don’t want to hear them.  Real solutions require hard choices and sacrifice which can be politically unpalatable.  Our two party system is intentionally combative and encourages our politicians to make our election about who will do a worse job rather than working together to do better.  Thus it is no surprise that no clear plans or solutions have been presented.  Instead we hear vague quick fixes, feel good soundbites and blame for the other party’s inability to fix it.  The saddest reality is that this is what the people want to hear because we’re not ready to face the hard truths of our predicament and demand our leadership do the same.

 

How do you think voters are impacted when a political party places emphasis on slogans, gimmicks and flag-waving rather than talking about its platform on specific issues? Do you think that has been an issue in Bermuda at this election or at previous elections?

Focusing on party branding and loyalty emphasizes the divide between supporters of each party.  It makes people take sides where they view it more important whether you’re with or against.  If you try to stand in the middle and focus on the issues you’re the enemy because you are not with the party.  It encourages blindness to the issues and no accountability.  People focus more on voting against the other party than holding their own party accountable.  That lack of accountability gives politicians a free mandate to do as they please knowing that next election they can just rinse and repeat with the same opponent.

 

The trend of each election seems to progress more towards party identity and further from the issues.  The internet has made governance hard and public opinion can be ruthless and unforgiving.  Politicians are not allowed to be people and make mistakes.  Thus politicians don’t want to admit they were wrong even if they were well meaning because it is often just a google search away.  It creates a fear of being held accountable for pledging something that seems like a good idea but turns out not to be but now are expected to see it through.  Thus it is easier to make no pledges, no promises and instead focus on being cheerleaders.

 

How would you like to see the final few weeks of the election campaigns unfold?

I would like to see  a genuine admission of what failures each party has made, why things didn’t work, what could be done differently and how they will adjust in the future.  Alongside that I would also like to see well thought out platforms outlining each parties solutions for the issues.  What would they do, how will they do it, why do they think it will work, what are the expected outcomes and how will they identify if it isn’t working and adjust.

What is the OBA’s education policy and present status?

The Minister of Education has a statement in Bernews today:

Minister: Committed To Our Children’s Education

Here’s the thing.  The first third of it talks about the union and the PLP’s misinformation.  The second third is the budget statement portion for education. The final third are some feel good platitudes.  What was the point here as I’m not getting it?

Yes, money was spent on education… and?  Perhaps do a little bit more explaining why this was necessary, what the value was or specifically rebutting the Union and PLP’s points.  Randomly accusing them of misinformation, trotting out the budget statement and then making some feel good statements honestly leaves me confused.

At the moment there is nothing on the OBA’s website regarding education that I can find and the 2012 platform has disappeared.  Going back in Bernews we can see there was a previous statement made in early June.

Minister: ‘They Now Claim To Have All Answers’

Yet when you look at it, a third is used to attack the PLP, then the remaining two thirds are a long winded statement.

This is one of the problems with this election.  How is anyone supposed to know what the OBA’s position is on education if their biggest focus is attacking the PLP and everything is published as a word for word statement.  It simply isn’t digestable.  Give me bullet points, diagrams, infographics.  Something that helps me get the gist of it.  Even a well formatted document with some bolded section headlines would be a step forwards.

Bermuda Election 2017: Big on slogans, short on solutions

“Forward together, not back”

“Standing strong, putting Bermudians first”

Bermuda’s future is looking bleak. We’re 3 weeks away from the election and each party is busy trying to discredit the other while neither has proposed tangible solutions to our predicament.  What little is out there represents the OBA touting their slow and steady track record but they lack any discussion of new plans and new ideas. The PLP, by contrast, have their Vision 2025 which is big on ideas but short on how to actually achieve them.  Hopefully things change before the election and we see solid platforms released soon with credible ideas and plans. If not, Bermuda’s future doesn’t look so good.

From the perspective of this blog, the greatest concerns for the next government are

  • How we manage our debt and deficit
  • How we manage our economy
  • How we manage our morale of our people

The debt and deficit are of huge concern and yet garner limited discussion.  We are so deep in debt and unfunded pension liabilities that it is hard to see how we’re going to work our way out of it.  We’re at risk of running towards bankruptcy as rates rise.  We can make things considerably worse if we take on more debt and can’t reduce our deficit. We risk pushing ourselves into a corner where drastic solutions like mass layoffs, currency controls and nationalizing private pensions become economy crushing realities.  There aren’t nearly enough people talking about this.

The OBA’s approach thus far has been to not rock the boat. They avoided reducing the civil service through anything but attrition and they’ve avoided raising debt aside from that required to pay interest and roll over previous debt.  It’s a low risk approach that hasn’t won them great accolades but has been working thus far, albeit incredibly slowly.  Unfortunately they likely will need to manage to stay in government for the next few hundred years it’ll take for the strategy to pay off.  They haven’t suggested they’d do anything differently.  Is it safe to assume an OBA government would be more of the same?

The PLP are frankly terrifying when it comes to the debt and deficit.  Don’t get me wrong, if Eugene Cox were still alive today and in charge of finance it’d be easy to sleep at night. However, finances after Eugene Cox were a nightmare.  We’re billions in debt and have very little to show for it.  The PLP’s track record is concerning because their answer to almost any problem is to throw money at it.  We don’t have that luxury anymore.  The PLP haven’t said anything about what they learned or what they’d do differently.  They frankly spend more time blaming the OBA for adding to the debt while conveniently sidestepping the question of how they would have cut the deficits they left behind and avoid more debt.  I truly pray that they are sitting on a credible strategy for addressing this that they’ll reveal shortly.  If not I fear a PLP government will put us on a path to national bankruptcy or drastic solutions and then national bankruptcy.

The economy is also a big concern.  We’re not in the midst of an amazing recovery and instead we’re still limping out of the recession.  International business is facing increased global competition and low rates that has led to consolidation in the industry.  Job numbers are still low and barely growing. The days of reinsurance being a growth industry are over as it has matured over the years.  Increasingly companies are having to start thinking about how to be more efficient vs. how to get more business and this is much harder to do.  On top of that, Bermuda has a big target on it’s back from politicians in the US and EU that introduces considerable uncertainty about our future.  Our economy has really only been kept afloat through stimulus programs like the hospital project, America’s Cup and soon the airport.  It is likely we wouldn’t be faring all that well if we didn’t have this stimulus.  We have to grow our way out of our predicament while simultaneously reducing costs and increasing efficiency, where are the plans to do so?

The OBA’s approach to the economy seems to be finding creative ways to stoke the fire with stimulus as well as public opposition while struggling for solutions to reignite growth. Beyond that they’re on a campaign to raise awareness of both our international business and tourism products.  They’re busy copying other jurisdictions with things like LLCs and casinos but where is the innovation? Doing business in Bermuda can be painful, bureaucratic and expensive.  We simply aren’t terribly competitive and while the OBA deserves credit for introducing a variety of positive small steps, they haven’t produced plans for how we can innovate and lead once again.  What tangible and innovative ideas does the OBA have to reignite growth or increase efficiency?

The PLP deserves credit for doing many good things when it comes to international business in their time while they also deserve credit for doing things that made the recession significantly worse.  Solvency II equivalency and TIEAs comes to mind as something where the PLP didn’t take their eyes off the ball and positively set up our future. However, poorly thought out policies like term limits were a disaster.  If 70% of people on work permits received a waiver from the policy then it wasn’t just ineffective, it was a joke. It did nothing to solve the underlying problem of providing more opportunities for Bermudians.  It was a politically expedient solution fueling populist notions that Bermudians were being put first when they weren’t.  In the end it was a failure and it contributed to the drastic downturn in jobs in the recession.

The PLP claims they are “putting Bermudians first” but that only seems to apply when it suits their political aims and doesn’t represent long term well thought out solutions that actually put Bermudians first. Protectionist populist notions seem to drive the PLP’s agenda which can be good for short term political gain but disastrous for long term growth.  To their credit, the PLP have quite a few ideas in their Vision 2025 but they are short on details and feasibility when implementation is the hard part. To lead effectively, you have to do more than come up with the idea. You have to execute on it.  Execution of ideas is where the PLP struggles.  What concrete well thought out plans do the PLP have to grow our economy or make it more efficient?

The morale of our people are the biggest concern as an angry populace can scuttle the best of efforts to recover the economy and tackle our debt.  Many Bermudians feel left behind and wonder if Bermuda is in their future or if they’ll have to migrate elsewhere.  Populist and protectionist biases drive people to believe that nationalism will provide better results in an age where we’re heavily dependent on global trade and commerce. These biases drive misunderstandings and fake news in this new age of the internet which has changed the scope of how people become aware of issues.  As such, it is incredibly important that people are involved in the decision making process far more than ever before and properly informed of what they’re deciding so that populist and protectionist biases don’t result in the local equivalent of Brexit or Trump.

The OBA have largely been out of touch with the people but to their credit have shown signs of learning from their mistakes. The OBA that was elected and the OBA we’ve seen over the last few years were very different from one another. As a result they’ve made some pretty big gaffs that have riled up the populace. One of their biggest problems they’ve faced is communicating with and involving the people in the decision making process. Many people feel left out of the process and feel the OBA isn’t focused on making the people’s future better, only that of the privileged class.  This is a serious perception problem that the OBA needs to address.  It was promised in the last election but we haven’t seen enough of it.  What indication is there that another OBA government will live up to those expectations?  The OBA claims “forward together” but they haven’t demonstrated enough thus far that together means all of us so how can we believe it will happen with another OBA government?

The PLP are very in touch with the people but too often capitalize on it for political gain at long term cost to our future.  Blocking parliament over the airport deal was a great example.  The cost to our reputation for stability wasn’t worth it and the fallout from it was disgraceful.  We truly need to put Bermudians first in the long term.  The PLP’s insight into what is broken and how Bermudians end up disadvantaged and discriminated against is valuable. However they tarnish their cause when they conveniently shift their positions for political gain.  Worse, their attempts to redefine “Bermudian” as only encompassing a certain segment of the population do more to divide us against one another than unite us to put all Bermudians first.

Frankly I’m discouraged with the prospects for the coming election.  Yet again we’re being presented between the choice of who is the least worst option rather than who is the best. We’re being bombarded with a disgusting amount of rhetoric and pointing fingers and almost no real solutions.  Neither party is living up to their slogans. The OBA haven’t lived up to be who they campaigned as and certainly don’t yet instill enough confidence that they’ll fulfill the pledge that by electing them we will move “forward together, not back”.  The PLP don’t yet instill enough confidence that they’ll fulfill the pledge that by electing them they will be “putting Bermudians first” vs putting the party first.  I hold out faint hope that things change before the election and that each party will wake up and start campaigning to deliver a better future together that puts Bermudians first.  Each party publishing real tangible platforms outlining their visions and plans for the future would be a good start.

 

Will AI and automation kill jobs?

This discussion keeps coming up and I thought I’d copy a comment I posted on a facebook thread here.

The first ATM machine went operational 50+ years ago in 1966 and bank tellers are still around today. The technology didn’t simply eliminate all jobs, it created efficiency that allowed banks to focus efforts elsewhere.

The days of a business dedicating large portions of their time to banking are gradually disappearing as advances like ATMs, internet banking and other inventions take hold. As a result, the cost of banking has reduced and allowed smaller businesses who would otherwise not have been able to survive to flourish.

We’ve been developing tools that replace labor in mass for centuries. From the printing press, to farming tools, to large machinery on to automated factories.

In each case it has never been a revolution that eliminates humans completely from the equation and instead is an evolution where we find an equilibrium. There is always a balance to be found of the cost of automation vs. the abilities of humans to do the work.

We won’t see as much of a rise in artificial intelligence in the form that replaces humans as we will in augmented intelligence that assists humans in becoming more productive. We need to figure out how to prepare for this and leverage the opportunities it will provide for people to be significantly more productive.

Our focus needs to be on supporting greater entrepreneurship to take advantage of new efficiencies and supporting the ability for workers to retrain to take advantage of new labour demands. A basic income is one of the greatest means to enable this.

America’s Cup unlikely to return?

The Royal Gazette has an article up downplaying the potential for America’s Cup to return to Bermuda.  Those who have followed its progress would know that this has always been a possibility.

My understanding is that the decision of where to host comes down to 3 core considerations.

  1. The team who wins ultimately decides where they want to defend.
  2. The defenders need to find a venue willing to host who sees enough benefit in it (eg. San Francisco had the option and turned it down because it didn’t make financial sense for them)
  3. Most of the teams are trying to convert the America’s Cup into a profitable business and build viewership.  New Zealand is the only country that is presently fanatical about the America’s Cup and likely doesn’t need this as badly.  The winner still ultimately has a considerable amount of say in the direction and future of the event.
This leads me to a few thoughts on the business side of things.  It is widely known that many factions in the America’s Cup are trying to convert it to being a more profitable venture similar to Formula One.  In order to do so they are heavily reliant on building solid TV coverage.  
The few reports on coverage so far is that it has not been ideal. This suggests they need interest through encouraging more teams and more events spread out over time. Hence the world series events and the reduction in boat sizes to encourage more teams.  The more competition, the more potential interest and viewership.

Thus we’re seeing an aim to shorten the competition from a 4 year cycle to a 2 year one.  Likely more focus on the world series and enough focus on the finale to sustain a big climax.  I believe that ideally they’d aim for a host of the finale on the East Coast of the US or alternatively Bermuda as the timezone sites well enough for coverage of the US during the day and EU in the evening which has the best potential for building viewership.  Chicago or anywhere else on the east cost still stand out as potentials.
Once the viewership is large enough then it can really be hosted anywhere but for now, the America’s Cup is a fringe sport.  Google Trends shows it pretty clearly when you compare America’s Cup to Formula One over the last 5 years.  They clearly want to convert the blue line to be more like the red one and the tiny spike of the last event in San Francisco pales in comparison to the regular interest in Formula One.
One other thing. People having animosity towards hosting the America’s Cup and making it political certainly doesn’t help as I’m sure they’d rather see focus on the event itself, not articles about local politics.
Will they host the finale in Bermuda again?  Only the winner knows.