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Are Harper’s Allies Fleeing

There is this feeling that he will be defeated in 2015.

After nearly a decade as prime minister, Harper’s capacity to reward loyalty is no longer what it used to be; nor is his latitude to punish those who cross him.
The prime minister can technically still appoint senators but a lingering scandal makes that politically suicidal. And on the heels of a string of bad appointments his judgment has widely been called into question.
Meanwhile, the more ambitious Conservatives are looking beyond Harper’s reign. The more timorous are afraid he might take them down with him.
Harper’s approval rating has fallen below 30 per cent. So have party fortunes in voting intentions. This is not a passing slump. It has endured for more than a year. And that can only exacerbate pre-existing tensions within a jittery party.
The coming-together of the Reform/Alliance and the Progressive Conservatives was never more than a marriage of convenience. Now the Tory wing of Harper’s reconstituted party is reasserting itself.
Brian Mulroney — a predecessor that the prime minister declared persona non grata over his dealings with lobbyist Karlheinz Shreiber a few years ago — is back on the Conservative celebrity speaking circuit.
Last week droves of Conservative aides, MPs and ministers came out to hear Mulroney deliver a keynote speech on energy policy. They gave him two standing ovations. Ministers John Baird and Peter MacKay respectively introduced and thanked the former prime minister.
In Harper’s own Calgary backyard last weekend, Conservative members removed loyalist Rob Anders — a six-term backbencher — as their 2015 candidate for the riding of Signal Hill.
They selected former Alberta minister Ron Liepert in defiance of the recommendation of Jason Kenney, the jobs minister, who doubles as Harper’s most influential Alberta cabinet member.
Former Bloc Québécois leader Gilles Duceppe once compared leading his party to a devastating defeat in 2011 to being trapped on an elevator in free fall. It is time to put a safety warning on the door of Harper 2015 re-election ride.

Then the mother of all civil wars then the Blue Tories and the Red Tories will battle for the leadership of the Conservative Party.

What went right (or wrong) during the Quebec election

This is how Maclean’s saw it.

The smart political strategist would do the following: put Péladeau on a stage and make him talk strictly about how he transformed Videotron from a Podunk cable company beset by labour troubles into the province’s leading cable and wireless concern. In the vacuum of a month-long election campaign, Péladeau the businessman could easily hide the red-ink-stained legacy of the PQ’s 18 months in power.
Instead, we got Péladeau the Quebec separatist. On a chilly Monday morning three days into the campaign, Péladeau took the stage with Pauline Marois and, after a 13-minute speech vaunting his economic record and the beauty of his riding of St-Jérôme, he uttered 30 words that would overshadow his campaign and that of his newly adopted party. “Finally, I end by telling you that my membership in the Parti Québécois is in line with my most profound and intimate values,” he said in French. “That is to say, make Quebec a country!”
An outsider to Quebec politics would probably shrug at Péladeau’s words; one would expect a declared separatist to declare his desire for separation, after all. Péladeau, who according to a Parti Québécois source, wrote the speech himself, certainly seemed to think as much.
Yet with his fist-bumping cri de coeur, Péladeau fell into the long-widening chasm between the Parti Québécois and its would-be electors. Support for sovereignty has been stagnant for ages, while the desire to exercise the means to get there—a referendum—has regressed. Some 64 per cent of Quebecers don’t want another referendum, according to a recent poll by the CROP polling firm. Even diehard Péquistes thought Péladeau went too far.
“I think he wanted to show his loyalty to the Parti Québécois and be liked by its members and he pushed a little more than he really had to,” said Gilles Gaudrault, a PQ supporter who was at the Marois love-in.
In the immediate aftermath of Péladeau’s declaration, Marois mused that citizens of a separate Quebec would have their own Quebec passport; people and goods would flow freely over the open and undefended borders with Canada. Quebec would use the Canadian dollar, and lobby for a seat with the Bank of Canada. Her strategists quietly put an end to Marois’s flights of fancy within 48 hours, but the damage was already done. And it was irreversible.
In Quebec City, Péladeau’s candidacy should have hearkened a return of the PQ in what has been a bastion for the right-of-centre Action Démocratique du Quebec party and its successor, the CAQ, led by former PQ minister François Legault. Yet Péladeau seemingly did himself in with those 30 words in this surprisingly conservative and federalist region and beyond. “I’m so disappointed in the guy it’s ridiculous,” says Mario Roy, an insurance broker and sometimes radio DJ, who in 2010 worked on a campaign with Péladeau to bring an NHL team to Quebec City. “You want to go into politics to fix public finances and put things in order? Fine. But to pump your fist and say you want a country? Tabarnak.”
It says something about the peculiar state of the sovereignty movement in Quebec that its star attraction couldn’t talk about it without the entire cause suffering politically, yet apparently the message was received. At the Théâtre Telus event, where you’d think a sovereignist leader would speak freely to a room full of the faithful, Marois and the PQ candidates stayed largely clear of the issue of sovereignty. Perhaps it was the lingering sting of Péladeau’s words, or the line of television cameras in front of her as she spoke. Péladeau didn’t even mention the word that night; a vote for the PQ, he said, was “a vote for the economy and jobs.” PQ candidate and former student leader Martine Desjardin was only slightly more direct. “We’ll be there when it comes time to build a country,” she said.
Instead of sovereignty, the Parti Québécois sought to ban religious symbols from the heads, necks and lapels of Quebec’s public sector employees. Introduced by way of a strategic media leak to the populist tabloid Journal de Montréal late last summer, the Quebec values charter sought guarantee for “the secular nature of our institutions,” as PQ minister and charter architect Bernard Drainville said. As a piece of legislation, it was almost certainly doomed to be challenged and defeated in the court, according to the province’s law society and its human rights commission, among others.
As an electoral gambit, though, the charter was seemingly a masterstroke. It allowed the PQ to pitch itself as the defender of Quebec’s francophone majority without having to talk about sovereignty itself. Successive polls suggested the majority of francophone voters liked the idea of a secularism charter, and the PQ saw a bump in its poll numbers in the wake of its introduction.
No surprise, then, that in the second week of the campaign, as Péladeau’s sovereignty sortie had effectively halted the PQ’s campaign, Drainville was tapped to rework his charter magic for the election. No surprise, too, that Drainville himself trotted out a warhorse of his own, a person who could add to the charter issue what Péladeau was meant to bring to the PQ’s economic platform: pioneering Quebec feminist Janette Bertrand.
Drainville introduced Bertrand at the Marois love-in, and the 89-year-old dame of Quebec culture hobbled out on a clear Plexiglas cane, cast aside her prepared speech and gave a fiery five-minute plea for a PQ majority. Anything short, she said, “and we risk pushing the plight of women backwards” in Quebec. Soon after, Drainville sent out a selfie of himself and Bertrand to his roughly 35,000 Twitter followers—one of the nearly 130 pro-charter tweets Drainville published in just over a month.
It took only marginally longer than Péladeau for Bertrand to flame out as a PQ saviour—15 hours, to be exact. The morning after her speech, Bertrand attended a “secular brunch” in the Montreal suburb of Laval with Drainville and local PQ candidate Léo Bureau-Blouin, 22, a former student leader.
Surrounded by reporters, Bertrand again went off the cuff, saying “foreigners, rich McGill students” (nameless Muslim men, apparently) had overtaken the pool in her building because they couldn’t bear the sight of Bertrand and her female friend doing their weekly aqua gym class. “That is what is going to happen if there is no charter,” she said. Bureau-Blouin, in the background, bowed his head and flicked dejectedly at his iPad, looking like he wanted to be anywhere but here.
Hurtful and demonstrably false—the Montreal Gazette quoted the manager of Bertrand’s building calling her claims “completely fictional”—Bertrand’s comments underscored the level to which the debate around the charter had sunk by the campaign’s end.

It’s how a lot of outside of Quebec saw it too.

One of the biggest issues facing our economy

Our businesses are having a hard time competing globally.

While we tend to celebrate private entrepreneurship, the state is crucially important in driving and shaping innovation. The question of which economies will thrive and which will lag behind on innovation has a lot to do with sound public policy.

With an economy historically reliant on natural resources and one with high rates of foreign ownership, the role government plays is even more important for Canada.

For 30 years Canadian economic policy has been focused on the supposed need to liberate private enterprise from the heavy hand of the state. The focus has been on slashing corporate tax rates, reducing public interest regulation and liberalizing trade and investment.

But has this “pro-business” agenda worked?

Since 2000, the Canadian economy has actually regressed in terms of producing highly innovative products and services for global markets, with major technological champions from Nortel to BlackBerry foundering. Over the last decade, labour productivity in Canada grew at a dismal pace and Canada is running record high trade deficits.

The key to Canada’s falling competitiveness is the fact that Canadian firms are not reinvesting their profits in areas that support long-run competitiveness — human capital and especially research and development. In 2011 the Canadian Conference Board gave Canada a “D” on R&D spending, ranking 15th out of 16 peer nations.

Canadian governments played vital roles in the development of innovative sectors in the past, for example in aerospace and information technology. Since then, however, the Canadian economic landscape has become increasingly dependent on natural resources, with privatization of the profits from its exploitation retarding rather than supporting industrial policy.

While profits may soar when taxes fall, investments don’t. Canadian businesses are hoarding cash at record levels — $626 billion according to Statistics Canada — and the investment that is taking place is in the resource extraction of the old economy rather than the innovative technologies of the new economy.

The combination of lagging private sector investment and public sector austerity puts Canada’s ability to be a world leader in new technologies in doubt.

I have always wondered why provincial governments don’t take the profit out of renewable resources and start incubating new technology or renewable resource industries like other countries have.  I think our resource economies have made us complacent and there is literally hundreds of examples of technologies that we have let stagnate and pass us by that the rest of the world is jumping on and making a lot of money while doing it.

What would Brad Wall do?

Murray Mandryk writes about what Brad Wall would have said about lean if he was the Leader of the Opposition

Suppose it was an NDP government that came to the Legislative Assembly with a $40-million, fouryear bill for an American efficiency expert applying principles used in the Japanese auto industry to health care and virtually every other aspect of provincial government. What would Brad Wall have said were it the NDP shelling out millions upon millions to Seattle’s John Black and Associates – $1 million of it just to secure Black’s services before he did any actual work?

Does anyone remember Wall and his Saskatchewan Party mocking the $37 million blown by the NDP on Spudco for useless storage sheds? Might Opposition leader Brad Wall have used terms like “snakeoil” or at least “a boondoggle”? Might the taxpayers’ and small business associations have screamed bloody murder about NDP waste?

How would then-Opposition Leader Brad Wall have reacted to the utter hubris we heard from current Premier Brad Wall in the legislature Thursday when he suggested that the NDP can’t criticize a made-in-Saskatchewan solution because it didn’t come up with the solution? Do you think that Opposition leader Brad Wall might have reminded Premier Brad Wall that this is the province that invented public health care? That Lean has not been proven to work on a provincewide scale? Or that many of the Lean “savings” the government talks about like hiring 900 nurses a) were done before Lean; b) are not part of the Lean initiative or even something Lean is exploring, and; (c) may not be savings at all?

Might Opposition leader Brad Wall have noted we pay health-care CEOs $400,000 a year and deputy ministers $300,000 a year with some expectation they should find these health saving efficiencies? Might that Brad Wall have noted there are cheaper consultants in this world?

Would Opposition leader Brad Wall have wondered why we have paid John Black $3.6 million in airfare in the last two years alone? Might that Brad Wall wonder about whether it was really necessary to fly in Japanese senseis at a cost of $3,500 a day each for their five-day lectures to health leaders (in addition to those $2,000 flights)?

Might he have further wondered if there is a better, more costefficient method of training 900 Saskatchewan health-care workers than flying them to Seattle to partake in what is now called the “world’s biggest health-quality experiment”?

And do you think the ever-flippant Brad Wall might have just had a little fun with what some describe as Lean’s required “cult-like” buy-in?

 

Our Soiled, Sorry Public Life

Excellent op-ed by Andrew Cohen

As part of their severance, those who serve 20 years or more are offered a last move, at government expense, after they retire. Soldiers are asked to live in many places; the policy recognizes that the house you occupy at the end of your career may not be where you want to remain.

Leslie served 35 years at home and abroad and moved 18 times. When he left the military in 2011, he wanted to simplify things. He moved from a bigger house to a small one, in the same neighbourhood. The move cost some $72,000, of which the real estate fees could have come to perhaps $60,000. The rest went to packing and moving.

All expenses were covered by government.

So, what’s wrong here? What’s the offence? A distinguished soldier does his duty, retires honourably and sells his house. The bills are settled by the government, because that’s the arrangement.

But that’s not really the story, is it? The story here has less to do with General Leslie than Citizen Leslie, or perhaps, in the future, Minister Leslie. It’s about politics.

While Rob Nicholson asks his officials to explain this long-standing government policy — one he could have changed but hasn’t — here are a few questions for him.

Why is Andrew Leslie the first veteran to come under this kind of public scrutiny? Is $72,000 egregious? If so, what is the average figure for moves involving such neighbourhoods?

And how is it that Leslie’s expenses found their way to CTV News, which first reported this on the weekend? Is there a breach of privacy in your department, Minister? Your office suggested the document was acquired under the Access to Information Act, but CTV did not.

We know what is going on here. Andy Leslie is a Liberal. His father was a Liberal. His service notwithstanding, that displeases the government. Tell us, Minister Nicholson, would you have ordered an inquiry if Leslie had been running as a Conservative? Would your question have been as sharp, your anger as hot?

Could it be that Leslie’s expenses would never have found their way into the media at all? And could it be that the Conservatives wanted Leslie to join them, when they learned that he was going to the Liberals? Let us see this for what it is: a drive-by smear.

Argue, if you want, that after years of dislocation and adjustment, that Leslie and his wife had no right to move to a smaller house. Make it another great moral failing of another public servant, as we like to do these days in a country filled with accountants of envy.

If you do, though, remember that soldiers spend their lives disrupting their families, often with little notice and at great cost. Ask yourself why soldiers are committing suicide. Ask yourself about divorce, domestic violence, addiction and other consequences of military life.

As we disparage a decorated general, seeing scandal that isn’t there, consider the greater affront of a government that tolerates a minister, Julian Fantino, who insults veterans as he cuts their services. Now there’s gratitude.

Then ask yourself why Andrew Leslie and other good people would even contemplate entering our soiled, sorry public life.

Why a Pacific War is Possible: Japan and China’s hatred for each other

As Time explains

From the long-distance perspective of an American, Asia looks like one of the world’s most peaceful places. And it is — for the moment. But when Vice President Joe Biden arrived in Tokyo on Monday, he stepped into what has suddenly become a dangerous diplomatic crisis between China and Japan. On the surface, it’s a dull dispute over a string of uninhabited Pacific islands. Underneath, as I realized on a recent visit to China, it’s a story reaching back some 75 years that involves war, brutality, rape and historical reckoning. And now threatens to drag in the U.S.
The immediate cause of the crisis is Beijing’s recent declaration of an air-defense zone over the disputed islands, a string of rocks about 200 miles southeast of China’s coast, not far from Taiwan. No one will ever vacation on the islands, but there’s a good incentive to claim them, given that they sit in an area of the Pacific that may contain enough oil to fuel China for 45 years.

Far more than a story about energy, however, this is a story about national pride and historical grievance. The showdown over the islands — whose very name the two countries disagree about: China calls them the Diaoyu and Japan the Senkaku — touches one of the most sensitive nerves in Chinese culture: the Japanese occupation of China from 1937 to ’45.

“It may be hard for you to understand,” an expert at Beijing’s Academy of Military Science told me in October, echoing several others to whom I spoke. “The nationalist feeling, the emotion toward Japan, is very strong.”

Japan doesn’t seem to like China either

Japan’s recent militarization is driven, in part, because the feeling is mutual: polling shows that the animus in Japan toward China runs about as high as it does on the other side of the East China Sea. The “unfavorable feelings” of each side toward the other runs poisonously above 90%. It’s certainly hard to argue that China has done anything to Japan comparable to the 1937–45 occupation. But one scholar on Sino-Japanese relations argues the animus is about envy and anxiety toward the roaring Chinese dragon.

Tough Year Ahead for Wall?

Trouble ahead for Brad Wall and the Saskatchewan Party?

In early December, the government issue a list of economic highlights for 2013: population growth, up 100,000 in six years; economic growth of 3.6 per cent, second-highest in Canada; unemployment rate of 3.6 per cent, lowest in Canada; employment up 17,000, “an all-time record;” and record crop production of 34.2 million tonnes (later increased to 38.4 million tonnes).

But recent economic forecasts have been more subdued. suggesting that the province’s economy may be due for a slowdown next year. Earlier this month, RBC downgraded Saskatchewan’s forecasted economic growth from 2.7 per cent to 2.1 per cent in 2014, which put us squarely in the middle of the pack among the provinces.

Part of that downgrade is just a return to a normal crop from the record harvest in 2013. But part of it is plummeting potash prices, plunging production and reduced capital spending.

Similarly, two commodity price reports this week pointed to weakness, not just in potash, but uranium, oil and agricultural commodities, like wheat and canola.

Oil prices are falling, thanks to widening differentials between western Canadian heavy oil and benchmark West Texas Intermediate, which are now pushing $40 US a barrel. Even Canadian light crude prices are $20 US a barrel lower than comparable U.S. crudes due to growing supplies of light oil production from North Dakota’s Bakken play and a chronic shortage of pipeline capacity.

Potash prices have fallen below $300 US per tonne, thanks to the collapse of the BPC cartel, while uranium prices are at a “low ebb” at $34.50 US per pound due to the fallout from the Fukushima tsunami in 2012 and the subsequent idling of 50 Japanese nuclear reactors.

Even agricultural commodity prices have been under pressure lately due to the “monster-sized crops” in the U.S. and Canada and are sitting nearly 12 per cent below levels one year ago.

Analysts forecast commodity prices “bottoming’’ in 2014 before returning to the “bull’’ market in 2015 and beyond.

The point is, Wall is right to be cautious about the province’s economic fortunes in 2014, despite the record performances posted in 2013. But that’s not Wall’s only problem.

He knows that the province’s fiscal position is far more tenuous than the rosy picture painted by Finance Minister Ken Krawetz in his midterm financial statement, which shows the province sitting on a $22.8-million surplus in the general revenue fund. This is the same general revenue fund that the provincial auditor’s report said was nearly $600 million in the hole at the end of the 2012-13 fiscal year, instead of the $58 million surplus reported by the finance ministry.

The same provincial auditor issued an “adverse’’ opinion on the province’s books, saying the financial statements do not provide a fair and accurate accounting of the province’s fiscal position.

So Wall finds himself between a rock and hard place, largely of his own making. Happy New Year will have a whole new meaning for the premier in 2014.

Don’t count the Premier down quite yet.  He enjoys considerable trust from the people of Saskatchewan and as Alan Blakeney once said, “It’s easier to govern duing adversity than prosperity.”  That being said, winning a third election is much tougher than winning the second.

Appeasing the base

Excellent column by Jeffrey Simpson on the Conservatives focus from now until 2015

Almost all you need to know about Canadian politics in the next two years can be summarized in one simple number – 10 per cent.

Ten per cent is the share of the electorate that has deserted Stephen Harper’s Conservatives since the last election. In that contest, the Conservatives captured a shade less than 40 per cent of the votes. For months now, polls have given the Conservatives about 30 per cent.

At 40 per cent, the Conservatives would win again, likely with another majority; at 30 per cent, they would lose power. Their aim – and it will drive almost everything they do in the next two years – will be to recapture all or most of the difference.

What about the other 60 per cent of the voting public? The Conservatives could care less about them. The overwhelming majority of those people aren’t going to vote Conservative, period.

Nik Nanos, the pollster, asks this interesting question on an ongoing basis: Could you imagine voting for a given party? He consistently finds that 60 per cent of voters reply that they could not imagine voting Conservative. The party’s ceiling, therefore, is 40 per cent.

No matter what the Conservatives have successfully done in office, no matter how hard they have tried and how much money they have spent, no matter how favourable the economic circumstances, no matter how inept the other parties, the Conservatives have never shattered that 40-per-cent ceiling. But if they don’t crawl back close to it by the time of the next election, they will struggle to be re-elected, let alone to win another majority.

Given this strategic imperative, you might think that midway through a majority government’s term, a party mired at 30 per cent would be rethinking its strategy. That would be to misunderstand the Harper government.

Instead of rethinking, the Prime Minister has doubled down on his long-term strategy, which depends on polarizing the electorate and identifying and mobilizing the Conservative vote. He reshuffled his cabinet to add younger ministers of the same type as the more experienced ones: hard-edged communicators and sharp-elbowed partisans. He regrouped people in his office and at party headquarters who are unreserved loyalists. There are no even mildly discordant voices, let alone fresh faces or new views, in Mr. Harper’s inner political circle.

Depressing.

Concerns over Jim Flaherty’s health

From Stephen Maher

Finance Minister Jim Flaherty’s appearance at a meeting of Canada’s finance ministers this week has renewed backroom speculation about whether his health will allow him to continue in his job.

As meetings at Meech Lake began on Monday, Flaherty was seen to struggle to get out of his car, and his voice was painfully weak as he addressed reporters later.

In the hours-long meeting with his provincial counterparts, he sat in silence most of the time, sometimes with his eyes closed, allowing minister of state, Kevin Sorenson, to chair the meeting.

“He did not seem like a well man,” said a person who was in the room. “He kind of closed his eyes a number of times, but whether that was just him sitting there listening or not, I don’t know.”

Tuesday on Parliament Hill, Flaherty was seen by a reporter walking with great difficulty.

In January, Flaherty went public with news about his health condition, bullous pemphigoid, a rare skin condition that produces painful blisters. He is taking the steroid prednisone, which can cause weight gain and, in large doses, can spur severe mood swings.

His staff did say that Flaherty was suffering from a cold at Meech Lake which could explain his mood there but he does seem to be suffering.  I can’t imagine the requirements of the job make it any easier to deal with his health condition.

In case you were wondering

This is why Mike Duffy was named to the Canadian senate

How Detroit went broke

An amazing long form essay by the Detroit Free Press.  The answers may surprise you – and don’t blame Coleman Young.

Detroit is broke, but it didn’t have to be. An in-depth Free Press analysis of the city’s financial history back to the 1950s shows that its elected officials and others charged with managing its finances repeatedly failed — or refused — to make the tough economic and political decisions that might have saved the city from financial ruin.

Instead, amid a huge exodus of residents, plummeting tax revenues and skyrocketing home abandonment, Detroit’s leaders engaged in a billion-dollar borrowing binge, created new taxes and failed to cut expenses when they needed to. Simultaneously, they gifted workers and retirees with generous bonuses. And under pressure from unions and, sometimes, arbitrators, they failed to cut health care benefits — saddling the city with staggering costs that today threaten the safety and quality of life of people who live here.

The numbers, most from records deeply buried in the public library, lay waste to misconceptions about the roots of Detroit’s economic crisis. For critics who want to blame Mayor Coleman Young for starting this mess, think again. The mayor’s sometimes fiery rhetoric may have contributed to metro Detroit’s racial divide, but he was an astute money manager who recognized, early on, the challenges the city faced and began slashing staff and spending to address them.

And Wall Street types who applauded Mayor Kwame Kilpatrick’s financial acumen following his 2005 deal to restructure city pension debt should consider this: The numbers prove that his plan devastated the city’s finances and was a key factor that drove Detroit to file for Chapter 9 bankruptcy in July.

The State of Michigan also bears some blame. Lansing politicians reduced Detroit’s state-shared revenue by 48% from 1998 to 2012, withholding $172 million from the city, according to state records.

Decades of mismanagement added to Detroit’s fiscal woes. The city notoriously bungled multiple federal aid programs and overpaid outrageously to incentivize projects such as the Chrysler Jefferson North plant. Bureaucracy bogged down even the simplest deals and contracts. In a city that needed urgency, major city functions often seemed rudderless.

When all the numbers are crunched, one fact is crystal clear: Yes, a disaster was looming for Detroit. But there were ample opportunities when decisive action by city leaders might have fended off bankruptcy.

If Mayors Jerome Cavanagh and Roman Gribbs had cut the workforce in the 1960s and early 1970s as the population and property values dropped. If Mayor Dennis Archer hadn’t added more than 1,100 employees in the 1990s when the city was flush but still losing population. If Kilpatrick had shown more fiscal discipline and not launched a borrowing spree to cover operating expenses that continued into Mayor Dave Bing’s tenure. Over five decades, there were many ‘if only’ moments.

“Detroit got into a trap of doing a lot of borrowing for cash flow purposes and then trying to figure out how to push costs (out) as much as possible,” said Bettie Buss, a former city budget staffer who spent years analyzing city finances for the nonpartisan Citizens Research Council of Michigan. “That was the whole culture — how do we get what we want and not pay for it until tomorrow and tomorrow and tomorrow?”

Ultimately, Detroit ended up with $18 billion to $20 billion in debt and unfunded pension and health care liabilities. Gov. Rick Snyder appointed bankruptcy attorney Kevyn Orr as the city’s emergency manager, and Orr filed for Chapter 9 on July 18.

It’s an amazing story and one that many cities could repeat if they can’t make hard financial decisions (Saskatoon loves our debt too).  Nice job by the Detroit Free Press to bring all of this together.  Including this great quote.

“It just makes me ill. Almost cry,” said former Mayor Gribbs, now 87, who served from 1970 to 1974. “You can’t continually borrow money and use it for operating expenses and expect never to have the trouble of paying it back. That’s where you end up going bankrupt.”

Pierre’s Boy Child

In other words, the left won’t be uniting soon

This got ugly quickly

"That Justin Trudeau would use Jack Layton’s dying words as a political tool says everything that needs to be said about Justin Trudeau’s judgment and character," Mulcair said.

New Democrat MP Olivia Chow, Layton’s widow, focused her reaction on Prime Minister Stephen Harper.

"I’m quite surprised that the leader of the Liberals used my late husband’s words, but at the end of the day Stephen Harper is the prime minister," Chow said.

"If we are to have a better country, and certainly Canadians deserve a lot better, we need to focus on Stephen Harper. Yes, we are the party of love, hope and optimism and let’s be hopeful. Let’s not be fearful of each other, but let’s train our eyes on the real problem, which is Stephen Harper’s government."

Trudeau, however, was unapologetic, accusing the NDP of being nasty and divisive in the hard-fought campaigns, which saw all three major parties use aggressive tactics.

In other words, it is okay for the NDP to use Layton’s dying words as a political tool but not Justin Trudeau.  I am glad we got that straight.

How things have changed

Stephen Harper back in 2005.

Unaccountable

Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.

Reuters journalist Scot J. Paltrow investigates how the US military’s bad accounting not only wastes taxpayers money, but helps ruin the life of ordinary soldiers and veterans.

Aiken, then 30 years old, was in his second month of physical and psychological reconstruction at Fort Bliss in El Paso, Texas, after two tours of combat duty had left him shattered. His war-related afflictions included traumatic brain injury, severe post-traumatic stress disorder (PTSD), abnormal eye movements due to nerve damage, chronic pain, and a hip injury.

But the problem that loomed largest that holiday season was different. Aiken had no money. The Defense Department was withholding big chunks of his pay. It had started that October, when he received $2,337.56, instead of his normal monthly take-home pay of about $3,300. He quickly raised the issue with staff. It only got worse. For all of December, his pay came to $117.99.

All Aiken knew was that the Defense Department was taking back money it claimed he owed. Beyond that, “they couldn’t even tell me what the debts were from,” he says.

At the time, Aiken was living off base with his fiancee, Monica, and her toddler daughter, while sharing custody of his two children with his ex-wife. As their money dwindled, the couple began hitting church-run food pantries. Aiken took out an Army Emergency Relief Loan to cover expenses of their December move into a new apartment. At Christmas, Operation Santa Claus provided the family with presents – one for each child, per the charity’s rules.

Eventually, they began pawning their possessions – jewelry, games, an iPhone, and even the medic bag Aiken used when saving lives in Afghanistan. The couple was desperate from “just not knowing where food’s going to come from,” he says. “They just hit one button and they take your whole paycheck away. And then you have to fight to get the money back.”

Aiken’s injuries made that fight more difficult. He limped from office to office to press his case to an unyielding bureaucracy. With short-term and long-term memory loss, he struggled to keep appointments and remember key dates and events. His PTSD symptoms alienated some staff. “He would have an outburst … (and) they would treat him as if he was like a bad soldier,” says Monica. “They weren’t compassionate.”

They were also wrong. The money the military took back from Aiken resulted from accounting and other errors, and it should have been his to keep. Further, even after Aiken complained, the Defense Department didn’t return the bulk of the money to Aiken until after Reuters inquired about his case.

The Pentagon agency that identified the overpayments, clawed them back and resisted Aiken’s pleas for explanation and redress is the Defense Finance and Accounting Service, or DFAS (pronounced “DEE-fass”). This agency, with headquarters in Indianapolis, Indiana, has roughly 12,000 employees and, after cuts under the federal sequester, a $1.36 billion budget. It is responsible for accurately paying America’s 2.7 million active-duty and Reserve soldiers, sailors, airmen and Marines.

It often fails at that task, a Reuters investigation finds.

A review of individuals’ military pay records, government reports and other documents, along with interviews with dozens of current and former soldiers and other military personnel, confirms Aiken’s case is hardly isolated. Pay errors in the military are widespread. And as Aiken and many other soldiers have found, once mistakes are detected, getting them corrected – or just explained – can test even the most persistent soldiers (see related story).

“Too often, a soldier who has a problem with his or her pay can wait days, weeks or even months to get things sorted out,” Democratic Senator Thomas Carper of Delaware, chairman of the Homeland Security and Governmental Affairs Committee, wrote in an email. “This is simply unacceptable.”

It’s a pretty widespread problem

A review of multiple reports from oversight agencies in recent years shows that the Pentagon also has systematically ignored warnings about its accounting practices. “These types of adjustments, made without supporting documentation … can mask much larger problems in the original accounting data,” the Government Accountability Office, the investigative arm of Congress, said in a December 2011 report.

Plugs also are symptomatic of one very large problem: the Pentagon’s chronic failure to keep track of its money – how much it has, how much it pays out and how much is wasted or stolen.

This is the second installment in a series in which Reuters delves into the Defense Department’s inability to account for itself. The first article examined how the Pentagon’s record-keeping dysfunction results in widespread pay errors that inflict financial hardship on soldiers and sap morale. This account is based on interviews with scores of current and former Defense Department officials, as well as Reuters analyses of Pentagon logistics practices, bookkeeping methods, court cases and reports by federal agencies.

As the use of plugs indicates, pay errors are only a small part of the sums that annually disappear into the vast bureaucracy that manages more than half of all annual government outlays approved by Congress. The Defense Department’s 2012 budget totaled $565.8 billion, more than the annual defense budgets of the 10 next largest military spenders combined, including Russia and China. How much of that money is spent as intended is impossible to determine.

In its investigation, Reuters has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn’t need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn’t known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies.

The consequences aren’t only financial; bad bookkeeping can affect the nation’s defense. In one example of many, the Army lost track of $5.8 billion of supplies between 2003 and 2011 as it shuffled equipment between reserve and regular units. Affected units “may experience equipment shortages that could hinder their ability to train soldiers and respond to emergencies,” the Pentagon inspector general said in a September 2012 report.

The American military has about 5,000 different accounting programs in use.  Most of them are incompatible.

In a May 2011 speech, then-Secretary of Defense Robert Gates described the Pentagon’s business operations as “an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results. … My staff and I learned that it was nearly impossible to get accurate information and answers to questions such as ‘How much money did you spend’ and ‘How many people do you have?’ ”

It gets better

The practical impact of the Pentagon’s accounting dysfunction is evident at the Defense Logistics Agency, which buys, stores and ships much of the Defense Department’s supplies – everything from airplane parts to zippers for uniforms.

It has way too much stuff.

“We have about $14 billion of inventory for lots of reasons, and probably half of that is excess to what we need,” Navy Vice Admiral Mark Harnitchek, the director of the DLA, said at an August 7, 2013, meeting with aviation industry executives, as reported on the agency’s web site.

And the DLA keeps buying more of what it already has too much of. A document the Pentagon supplied to Congress shows that as of Sept. 30, 2012, the DLA and the military services had $733 million worth of supplies and equipment on order that was already stocked in excess amounts on warehouse shelves. That figure was up 21% from $609 million a year earlier. The Defense Department defines “excess inventory” as anything more than a three-year supply.

Consider the “vehicular control arm,” part of the front suspension on the military’s ubiquitous High Mobility Multipurpose Vehicles, or Humvees. As of November 2008, the DLA had 15,000 of the parts in stock, equal to a 14-year supply, according to an April 2013 Pentagon inspector general’s report.

And yet, from 2010 through 2012, the agency bought 7,437 more of them – at prices considerably higher than it paid for the thousands sitting on its shelves. The DLA was making the new purchases as demand plunged by nearly half with the winding down of the Iraq and Afghanistan wars. The inspector general’s report said the DLA’s buyers hadn’t checked current inventory when they signed a contract to acquire more. 

Mind boggling stuff.