Wednesday Night #1229

21 September 2005

Despite the lip service we have paid to other topics, Katrina, the aftermath and oil have inevitably dominated, or provided a strong undercurrent, on the last three Wednesday Nights, though last week’s aviation safety night managed to cover some important international development issues, as well as Bill Weintraub’s new book.
This week, as the arguments continue in Washington and Baton Rouge over the rebuilding of New Orleans [we are glad to see that common sense and Admiral Allen have prevailed on the early repatriation of some of the residents], it is time to turn our thoughts to other events both at home and abroad.
Elections in Afghanistan, Egypt and Germany – very different strokes for different folks. As might be expected, nothing will be clear about the first until October 22; Egypt was a foregone conclusion, but who was predicting that orderly Germany would have such chaotic results? [But then, as we all know, nobody could have predicted the effects of Katrina]
Promising news from Beijing that North Korea has agreed to drop its nuclear weapons program, however observers note that there are an awful lot of details to be worked out before this particular pudding will yield proof.
Was anyone paying attention when Paul Martin scolded the UN last week?
Was anyone surprised that Bill Clinton finally criticized the Bush Administration for its tax & fiscal policies, Iraq and failure to help the neediest in New Orleans?
Should we be paying attention to the nine – count them – candidates for the PQ Leadership, or hope that a few of them are shaken out of the tree before the vote? Although, maybe we should, in honour of the anniversary of the filming of “René Lévesque” at the house.
Is it too early to take anything Pierre Bourque and Gerald Tremblay say seriously? It does look like a real race, doesn’t it?
Does anyone care about who is right and who is wrong in the Mulroney/Newman catfight?
Did everyone catch the profound statement reported by Canadian Press that “Senior Washington officials are seriously weighing possible exemptions to hefty duties on Canadian softwood lumber exports, to help their own economy while easing the way for new talks to resolve a bitter trade dispute.” (We put this in the well, duh! category)
While all of these are more or less deserving of our attention, one of our traditionally favorite topics is Education. We are used to decrying the state of education in North America, the relative illiteracy and lack of broad culture of the students, the excruciating cost of text books, the demeaning public squabbles over gender equality in intellectual capacity, and the need to increase tuition levels in under-funded Canadian institutions of higher learning. It is however worth examining the claim by the Economist that:
“… since the second world war Europe has progressively surrendered its lead in higher education to the United States. America boasts 17 of the world’s top 20 universities, according to a widely used global ranking by the Shanghai Jiao Tong University. American universities currently employ 70% of the world’s Nobel prize-winners, 30% of the world’s output of articles on science and engineering, and 44% of the most frequently cited articles. No wonder developing countries now look to America rather than Europe for a model for higher education.”
How applicable is this statement to Canadian universities and what needs to be done to improve our universities? How does the newly-announced Institute for Governance of Private and Public Organizations, a joint initiative of Concordia and HEC, help to solve the $2.5 million deficit of the John Molson School of Business? Does a proliferation of specialized institutes and studies programmes enhance a university’s reputation, or merely dissipate resources among a number of institutions?

The Report

Introduction
Although the topics of conversation were serious, it was a light but informative, delightful evening. Diana’s birthday falling on a Wednesday this year may very well have attracted the extraordinary group of guests who succeeded in discussing serious topics in a light vein.
Editor’s privilege
It is not tradition to quote from the thank-yous at the end of Wednesday Night, however, I feel strongly that the words I said at the end of this evening, which were heartfelt should be included.
I cannot think of a more marvelous occasion than having my birthday on a Wednesday Night because Wednesday Night has become such a central factor in our lives for 20-odd years, but so have all of you, whether you are long-time or relatively recent participants. You have all contributed so much to our intellectual life, our emotional life – we care about you and I think that many of you care about us. I sit at the end of this table week after week and I glory in what happens here: wonderful new ideas, challenges of old ideas,and a tremendous mutual respect (sometimes going a little overboard!). I want to thank each and every one of you, not only for being here tonight, but for being part of Wednesday Night and for continuing to challenge us.

Absent Friends
Following the Wednesday Night tradition of honoring major figures who have died recently, the evening opened with coverage of the death of the remarkable Simon Wiesenthal, “the Nazi Hunter” at the age of 97, followed by mention of Richard Holden, certainly one of Montreal’s more notable characters, who died on Sunday.

Wednesday Night’s Reality TV
There had been a semi-serious debate prior to the evening’s start as to whether it would be more instructive to watch clips of “The Apprentice, Martha Stewart”, Donald Trump’s “Apprentice”, or the debate of the PQ candidates (we felt there was a certain juxtaposition here that could be amusing, Ed.).
Instead, in an exceptional segue to last week’s aviation safety topic, as guests assembled, they were treated to the riveting live coverage of the crippled JetBlue A-320 landing at Los Angeles airport. Happily, the landing was perfectly executed despite the nose landing gear problems and all applauded as the plane came to a stop. The extraordinary aspect of this event was that the plane’s monitors carried live DirectTV broadcasts on the plane’s problems until the actual landing, giving a whole new meaning to in-flight entertainment.

The world economy
Katrina and a partially related world oil crisis have been responsible for dark clouds on the horizon, largely ignored in the recent weeks, but making themselves more evident with the passage of time. The devastating cost of the restoration in the U.S. southern states added to that of an expensive war and an alarmingly rising national debt, as well as the political and economic problems in the European Union, are all cause for concern.
Increasing energy costs have begun to affect the price of consumer goods, hourly wages and salaries. Rising interest rates in the U.S. may very well slow down the economy, and with housing sales having peaked, the retail sector having slowed down, there is very little optimism for the near term.
In Asia, there is skepticism about Chinese banks, particularly in view of western banks moving in to buy state-run industrial banks [Editor’s note: Hans Black writes a very informative piece about this topic in the September issue of Interinvest’s Review & Outlook] and the situation in Europe is disastrous with the (sort of) election of Angela Merkel, and political problems in Italy and France are certainly not cause for celebration.

The U.S.
There is increasing disillusionment with the current American government, although Paul Wolfowitz has apparently proven his detractors mistaken by doing a creditable job at World Bank.
Katrina, on the other hand, seems to have proven at least as destructive to President Bush’s reputation as to the geography of the U.S. south. Although “Katrina was the most anticipated natural disaster in American history … still government managed to fail at every level.” The fear of acting illegally without following the request protocol was (apparently) largely responsible for the delay, but this merely points to the usual reluctance of elected officials and civil servants alike to take personal risks in the face of disaster. [Editor’s note: there were some remarkable early successful interventions despite the delays in overall response, particularly by U.S. Coast Guard teams.] None of the three levels of government is blameless. The appointment of an independent commission to investigate the failures and recommend effective solutions is absolutely essential, but in the meantime preparations for the onslaught of Hurricane Rita appear to be benefiting from some of the lessons learned from Katrina.

More on Katrina and lessons to be learned
The deterioration of the levees in New Orleans had been well known and it has been claimed that the budget for their maintenance had actually been cut in order to help fund the war in Iraq.
This is not an act of God. It was a non-act of Man. It has been clear that the levees had deteriorated
The lawlessness remains unexplained. Certainly, there was no equivalent looting and shooting in Montreal during the 1998 ice storm, or in Japan in the wake of the Kobe earthquake of 1995.
While the effectiveness of disaster plans cannot be determined until they have been tested in real time, the deterioration of the levees had been well known. Infrastructure throughout North America is known to be in an advanced state of deterioration, why hasn’t the necessary (and obviously substantial) investment taken place? The answer most likely lies in the lack of immediate return for administrations that have a 4-year life.
The scientists got it right – they predicted what was going to happen to a T
It’s human nature … who wants to hear about getting ready for a disaster? It’s not a vote-getting thing
Holland is frequently cited as the high-risk area that has succeeded in avoiding like disasters.

[Editor’s note: It must be remembered that the superb Netherlands system, which took 25 years to put in place, was designed and built only after the devastating flood of 1953 when old dikes and seawalls gave way during a violent storm, causing nearly 2,000 deaths and the destruction of more than 4,000 buildings. [High-Tech Flood Control, With Nature’s Help]

We are quick to judge the slowness of reaction time harshly, pointing to our success in overcoming the ice storm in Québec and the Toronto SARS epidemic. However, there was slowness to react here too, as the Montreal response was directed from Québec City for some time, and there was potentially total disaster had the one remaining functioning electrical line failed without any viable evacuation plan for the island of Montreal. Toronto, too, was fortunate. But, today, Canada is not in any position to point fingers; there is a total lack of preparedness, despite warnings from such bodies as the CMA. Knowing that during the SARS epidemic health professionals were locked into the hospitals away from their families, it is totally possible that a recurrence might see them escaping, exacerbating an already almost insurmountable problem. And we can be sure that another occasion will arise, possibly related to the avian flu.
Switzerland is a country where all citizens are believed to be prepared for any eventuality. Prevention of landslides by covering glacial ice with plastic is proving to be less than satisfactory as global warming is proving to be a stronger force than human efforts to thwart it. We as humans, apparently not learning from repeated natural disasters, appear to be attempting to thwart nature rather than work with that force which has been largely responsible for our creation.
The question naturally arises as to the suitability of investing two hundred billion dollars into the reconstruction of New Orleans, a city where there is a distinct possibility of a recurrence of a clone of Katrina. Some advocates believe that it would be less expensive and more logical to reconstruct the historical areas of the city, and rebuild the residential area in a less vulnerable area. The advice of these thinkers will most likely be ignored. Nor is it likely that sufficient attention will be paid to the need to rebuild the shoreline, mangroves and barrier islands – some of which have totally disappeared -.

Troubled public sectors
Two areas of public administration are having problems these days, namely Health and Education. In her Massey Lectures The Cult of Efficiency (2001) Janice Gross Stein argued that what will define the quality of education and the quality of health care is whether citizens and governments can negotiate new standards of accountability and this in turn implies that educated people from all walks of life must become involved in the debate and reform of these two areas. For example, if the public education system fails the small child, it is easier for parents to hire a nanny than to become involved in the long battle for reform. But it is precisely the parents who can afford alternatives whose input and action is most critical to the survival of good public education.
The most effective educator on the planet today is Osama bin Laden and we could learn a lot from the way he does it
Those who are involved in the healthcare profession see the failure in the education system as a root cause of a number of failures in the medical system. If people are not sufficiently educated that they can understand and manage their own healthcare, then the healthcare system becomes grossly overburdened. University students who are not acquiring adequate communication skills, both written and verbal, have difficulties in carrying out non-clinical tasks.
In at least one opinion, the key to success in both education and public health is determining how to serve the needs of the user rather than the employer. It would be advantageous if all those involved in public service bargaining could be persuaded to pay attention to the mantra of the ISO quality control international standards that it is essential to pay attention to the requirements of the client. Neither patients nor students may be in a position to define what has to be done, but they can identify problem issues.
The unionization of staff appears to be detrimental to the introduction of technologies that might lead to better teaching and more efficient use of staff in both areas. It is ironic that unions, whose principal purpose it is to further the interest of their members, appear to put most of their efforts into maximizing the income of their members rather than in encouraging the greater use of their physical and intellectual skills.

Assisted Suicide
The federal government is reported to be leaning towards the legalization of assisted suicide in some instances. At first sight it appears odd, that the impetus for this step, whether or not it is deemed a step forward, may have come from films such as Oscar Winners Million Dollar Baby and The Barbarian Invasions. However, throughout history, whether it be from nursery rhymes, fairy tales, plays or Gilbert and Sullivan, the arts have been a powerful engine for social change.

Income Trusts
There has been harsh criticism on the part of Wednesday Nighters of Ottawa’s decision to suspend advance tax rulings on new Income Trust offerings. In reality, the rules have not changed except regarding the advance tax rulings and there is judged to be a one hundred percent probability that new offerings will be accepted as the precedent has been set. Ottawa is concerned that the trend to income trusts is depriving it of corporate taxes, several hundred million dollars so far this year, and is signaling that there is going to be a change in the regulation of income trusts, but has chosen to do so in an awkward way, creating uncertainty and thus causing the market to slide The two things believed wrong with this approach are, 1) the government has altered the rules by precedence rather than by legislation, and 2) a message is being sent to the international markets that you can’t depend on the Canadian capital market in the long term.

The PQ Leadership
To live in Québec is to be part of an audience in an epic drama. The current scene features a young, good-looking, charming actor who, although he has confessed to being a cocaine user while a cabinet minister, aspires to be the first Prime Minister of a new Country. Unfortunately, to those who know him, he appears to be a man of little depth, who will probably not succeed at holding together a badly split party (Update: he didn’t and had to resign within 2 years). The play would have probably been more interesting if this scene had been played later on in the drama, but the current script raises the possibility that he may be defeated by the previous front runner, a woman who, so far has not been slated to play the role she has worked so hard to achieve. The leader of the opposition, not a strong character himself, looks upon the turn of events with glee. The play goes on endlessly, with an understudy occasionally taking over from the seasoned actors.