The WSJ/Heritage Foundation rankings for 2007 are out, and it makes for some fascinating reading as usual.

In the overall ratings Hong Kong, Singapore and Australia come out on top (here's the top-10), but if you want to have some fun download the excel worksheet and start sorting the data per category. What is the best place to be free from corruption? Iceland. And where can you best hire and fire your employees? Georgia. And finally, my favorite probably: the 'freedom from government' category. Best place to go? Guatemala, closely followed by Haiti. Hmm.

(hat tip: Johan Norberg, who as a Swede finds himself on the bottom of the 'freedom from government' rankings, together with Libya and Cuba)

As you know, I've always considered 'liquor boards' highly problematic institutions, especially in cases where they curb free trade and force the consumer to fork out obscene amounts to fund government budgets and fat nunion contracts. But now it appears that free speech is equally endangered by overzealous liquor administrators, in Maine this time:

The state’s Bureau of Liquor Enforcement in September rejected three beer labels proposed by Shelton Brothers, a Massachusetts beer importer, including one for “Santa’s Butt Winter Porter” that depicts St. Nick from behind, checking a list and drinking a beer, his ample posterior on a wooden barrel.

The bureau said the labels violated a regulation stating that alcohol advertisements cannot contain “undignified or improper illustrations.”

The Maine Civil Liberties Union sued the bureau on Thursday in Federal District Court in Portland on behalf of Shelton Brothers, claiming that its right to free speech was being violated.

As they should, and Santa's butt looks pretty harmless to me too:

This beer was also targeted by Maine's liquor board. Whatever the outcome, Shelton Brothers is getting some nice free publicity out of this affair and if their beers are as as good as their creative inclinations then their future looks pretty bright.

In what may be a first, Germany has decided to start charging a licence fee for using the internet to access TV and radio programmes. And that relates to internet access only, what logically follows is that governments will eventually want to have a chunk of the ever increasing amounts of real cash that change hands in online virtual worlds. Let's see what revenue hungry country moves in first.

Here is an area where the EU is clearly failing to promote competition: taxes.

It's not just Europe that needs to take a closer look at its work habits, according to one of Quebec's eminent politicians:

Former premier Lucien Bouchard has set off a firestorm of debate by saying Quebeckers do not work hard enough.

The former separatist leader of the Parti Québécois said Quebec trails Ontario and the United States in economic terms, in part because its residents lack the same work ethic.

In a television interview, Mr. Bouchard said Quebec is failing to make economic headway and that its future could be very, very difficult. Labour leaders were enraged.

I bet they were. Quebec’s unionization rate is one of the highest in the world and their hold on the local economy has not only throttled fresh investment, it has created a culture where ‘work’ or ‘effort’ are often secondary to perceived basic rights such as leisure time and other off-the-job perks. It reminds me of the late 80s in The Netherlands where supermarket employees went on strike, protesting plans to keep stores open after 6 PM in order to enable other workers to shop. Closing hours eventually were relaxed, but the right to a 'social life' for workers at the check-out counter remained a very potent obstacle to rationalizing shopping hours.

To be clear, I remain an ardent supporter of holidays and various other breaks, which is one of the reasons I work for myself. In the end I devote more time of my waking hours to working, I do however have the ability to schedule them flexibly and are able to negotiate a decent price for this arrangement in the marketplace. And that is precisely what is lacking in economies that are either overregulated or highly unionized. The inability to attract various types of workers in different time slots prevents businesses from offering more services at a better price and in the end creates a barrier to raise an adaptable workforce. And no, this is not a clever argument for the creation of a low wage labor pool waiting to be abused 24/7 although that is most likely what Bouchard and other economic reformers will hear when they make their point. It is an argument for wealth, for all.

What America's social conservatives have done to U.K. gaming companies, and Russia's siloviki are doing to international oil companies, E.U. protectionists are trying to do to American farmers.

According to Irwin Stelzer who argues that despite globalization, many barriers to free trade continue to be erected all over the world. Not all of his logic is sound - there is a difference between extra-territorial legislation and using domestic law to curb certain economic activity at home - but his basic point about the increasing complexity of economic interdependence stands.

Fascinating piece from the 2006 Nobel Prize winner for economics, Edmund Phelps which among other things touches on the fundamental differences between capitalism in the US, UK and Canada on the one hand and Western Europe on the other. The key focus is on dynamism and innovation and I loved this bit in particular:

I must mention a "derived" benefit from dynamism that flows from its effects on productivity and self-realization. A more innovative economy tends to devote more resources to investing of all kinds--in new employees and customers as well as new office and factory space. And although this may come about through a shift of resources from the consumer-goods sector, it also comes through the recruitment of new participants to the labor force. Also, the resulting increase of employee-engagement serves to lower quit rates and, hence, to make possible a reduction of the "natural" unemployment rate. Thus, high dynamism tends to bring a pervasive prosperity to the economy on top of the productivity advances and all the self-realization going on. True, that may not be pronounced every month or year. Just as the creative artist does not create all the time, but rather in episodes and breaks, so the dynamic economy has heightened high-frequency volatility and may go through wide swings. Perhaps this volatility is not only normal but also productive from the point of view of creativity and, ultimately, achievement.

Remember that the next time we're in a downturn.

It is May Day today, or International Workers Day. Although there is nothing against celebrating the worker - by turning today into a day of work for instance - we can all agree that this particular issue was hijacked by history’s most unsavory characters. I tried to find a fitting photo for you, but after a long google journey settled on the two men who were able to transform the concept of workers’ rights into a veritable workers’ paradise.

Throughout the 1950s, 1960s and 1970s their ideas and political legacy found a significant market all over the world, but in particular Europe’s political culture was open to the ideas of 'progress' as promoted by Marxism and Communism. It leaves us to wonder if on a day like today there will be any attempts to remember the millions of victims whose lives were terminated for no other reason than not fitting into the vision of Karl Marx’ intellectual heirs.

Today May Day continues to be celebrated around the world. In the US the illegal immigrants have turned it into a day of action and ‘walk-outs’. Pajamas Media will cover events from Los Angeles and Michelle Malkin has a video primer for today.

UPDATE: Andrew Sullivan:

On May Day, the evil of communism needs to be remembered; and its millions of victims mourned and recalled.

And over at Catallarchy there is a round-up of May Day posts:

Contrary to the promises of ideology, nations whose governments pledged to create a workers’ paradise usually became places of rampant slave labor. The plight of the less fortunate became even less fortunate. Today, we chronicle a small part of their lives.

Canada’s new conservative government is on a roll with Stephen Harper threatening an early election if his budget – which contains a few controversial items – is rejected by parliament. And poll numbers indicate he would do well if such a snap election were held today.

This week the debate has centered around one of the more interesting features of the upcoming budget, the proposed childcare benefit which amounts to a taxable $1200 cash benefit per year for each pre-school child. Of course, the critics are correct in pointing out that this is a pretty measly hand-out which won’t buy you an awful lot of care for your child. But that is not the point here.

With the proposed childcare benefit, Harper aims to achieve a few things. Firstly, in order to fund it he will scrap the bloated one-size-fits-all solution put in place by the previous Liberal government which will inevitably create a unionized, huge in overheads, behemoth that will benefit and take care of everyone except your child. It’s an outdated solution, based on an outdated nanny-state philosophy. Secondly, and this is the more interesting part, the new childcare benefit seeks to give parents who have made the choice to stay at home something of value which they would miss out on if the one-size-fits-all solution were to be implemented. You want to invest in your child? Great, but don’t expect to see any of your tax dollars coming your way as we need it to fund our cradle-to-grave plans for other children. So, the new plan above all gives parents the right to make their own choice and frees them from being subject to an expensive institutionalized system of almost mandatory daycare.

All sound logic you will say, but the left has reacted as if bitten by a snake. Yesterday’s Globe and Mail ran the same picture of Harper as the one you see above, but it was accompanied by the headline “Social Conservatives to sell Tory daycare plan”. The positive, well-meaning and sometimes costly choice to stay at home for the first few formative years of your child’s life is for some not a particularly progressive choice. Worse, today’s “progressives” tend to look down upon moms and dads that are willing to forego income to help raise their child.

One other thing will also take center stage here. Many opponents to Harper’s plan will argue that some do need the old statist solution to their problems because some just can’t make ends meet without it. You won’t here a response to this argument from the conservatives, too awkward politically, but I will hand it to you: If you can’t make ends meet, you shouldn’t have a baby; if you’re a single mom you haven’t exactly acted very responsibly in getting pregnant in the first place; if your marriage is rocky then maybe you shouldn’t have a baby. In short, take responsibility.

It is too early a stage to throw a value as “socially conservative” as ‘responsibility’ in front of your average citizen, but with his childcare plans Stephen Harper has at least made an earnest beginning. By the time the little kid that pinches his nose is a grown up, maybe citizens can be expected to responsibly make their own choices without the omnipresent state as the giver of last resort.

Via Baroneblog, I came across this highly instructive piece by John Miller about the need to eliminate Indian reservations as a way to eradicate Indian poverty. This is surely one of the other famed legacies of the age of political correctness that has prevented Indian communities from lifting themselves out of poverty. And the reasons are plain and simple:

Maybe we should give land back to the rez-dwellers, so that they may own private property the way other Americans do. Currently, the inability to put up land as collateral for personal mortgages and loans is a major obstacle to economic development. This problem is complicated by the fact that not all reservations have adopted uniform commercial codes or created court systems that are independent branches of tribal government--the sorts of devices and institutions that give confidence to investors who might have the means to fund the small businesses that are the engines of rural economies.

This issue is prevalent in both the US and Canada, but I suspect that entrenched interests in both nations make reform too onerous and risky a process for any sane politician to try his or her hands on. And there is probably little to be gained from allowing some poor Indian families to own their property and help build some equity in their quest to better their lives. But it remains a terrible stain on North America that can only be washed away by promoting certain basic economic freedoms.

The NY Times is reporting that a Madison WI internet startup company is challenging the Realtor hegemony.

The service, FSBOMadison allows home owners to list their properties for sale. Instead of a commission, the site charges a flat fee of $150, and throws in a lawn sign. The site now claims a 20% share of the local market, which must just have local Realtors freaking out. The Times has gone so far as to compare the service to the NASDAQ, and calculates that in 2005 alone, the site theoretically cost local realtors $17 million in lost commissions.

Of course, FSBO sites are not new. (I count 7 just covering British Columbia.) But looking at the site, the owners have done a number of things right. First, the price can't be beat. Second, they have an easily searchable interface for buyers, and most importantly they link to a map. This seems obvious but a brief survey of the competition suggests it is not.

I loved the story as to how it all came about:

The cousins contacted for-sale-by-owner sellers in the local newspaper, about 25 of them, and offered a free listing on a Web site. Ms. Miller's husband paid $50 for a used power saw at a garage sale to make yard signs. They checked out library books on making a Web site. With eight listings, including Ms. Murphy's, FsboMadison went live Feb. 28, 1998.

A young couple found the site and bought Ms. Murphy's house. "We sat there and had a glass of wine," Ms. Murphy recalled. "And they said, 'Hey, there's that crack in the basement wall.' And we said, 'No problem. We'll take care of it.' "

Dealing directly with each other seemed so civilized, she said. "I keep coming back to that."

I think this is what really upsets Realtors. Most want you to believe that real estate is a high-stakes, high-emotion game, and you need their protection. When I was looking for houses, I initially used a Realtor to shop around. But I was frustrated with the service. I found most of the listings myself, and wondered what exactly he was providing. In the meantime, the houses he did find for me did not meet my explicit requirements, which he claimed were impossible. I wanted a house like my friends P&E, I said. It had everything I wanted. So I ditched my realtor and bought P&E's house privately when they announced they were moving to Vancouver. Somehow we managed to come to an agreement just fine without ending the friendship.

In the end it's just not that hard. A lawyer can help you with the sale papers, and you have to pay him anyway.

William A. Black, a lawyer for the Wisconsin Department of Regulation and Licensing, says he does not think consumers who bypass real estate agents are missing much. "The majority of residential transactions are very simple: 99 percent can be done without a broker. And the 1 percent screwed up - the broker couldn't have prevented it."

So no wonder Realtors are testy about the business:

To real estate agents, "for sale by owner" conjures up some cranky tightwad trying to sell an overpriced, ramshackle house. Agents utter FSBO as if there was something foul stuck to the bottom of their shoe. "It's a commission-avoidance scheme," said Sheridan Glen [well yeah - ed.], manager of the downtown Madison office for Wisconsin's biggest real estate broker, the First Weber Group.

Mr. Glen ticks off the tasks that real estate agents handle: using market expertise to price a house; advertising and showing it; negotiating an offer; organizing the paperwork for closing. "We do a good job," he said. "We deserve 6 or 7 percent."

Well Mr. Glen, clearly there are many, many people out there who disagree with that statement. Especially since most sellers simply do not see their agents working that hard.

But good luck with that attitude.

(Posted by Ginna Dowler)

(Here's a topic which I'm sure will be new to Peaktalk readers!)

Further to my comments about Walmart and suppliers digging their own graves, I'm making a confession here which will surprise not one of the readers who know me in real life:

I read romance novels.

Yes, it's true. I used to feel guilty and try to hide it, but I don't even bother anymore. I'm not alone though - Romance novels make up 18% of all adult books sold, and more than half of all paperback fiction, accounting for a staggering $1.63 billion in sales in 2002.

Okay. So part of that $1.63 billion is my money. In my youth, I bought Harlequins because they were cheap. In university, my roomate and I shared a subscription to Harlequin's mail order club. For something like $20 a month, 5 or 6 books were mailed to us. Magic!

Anyway, as the years went on, I moved away from "category" romance, as it's known in the book trade. I realize now that I did so after TorStar bought both Harlequin and Silhouette and started making changes.

Up until a few years ago, Harlequin/Silhouette (same company) was the cash cow of the TorStar empire. Category romance used to be king in the industry, but the percentage of readers who only read series romances has dropped to 18%.

Part of this is that TorStar seemed determined to kill the category romance. It's not clear why. According to their 2004 annual report, revenue was down 20% from 2003. They complained that the mail order business was "challenging", so they axed it altogether this year., driving more women to the stores, where they might select romance novels from many publishers. Good one.

Now, they've decided to shrink the things even further. Smart Bitches - Trashy Books (which is one of my favourite sites, although not always work-safe) reports that Harlequin is sick of getting complaints from readers that the fonts are too small and the margins too narrow. The solution? Shrink the word count.

For their "long" books, instead of 80-85K words, the size restriction for authors will now be 70-75K words. Same price, of course. Is this likely to drive me back into the arms of Harlequin? Ummm, no. Unlikely.

The other strange strategy they have adopted is that of increasing category granularity. At eHarlequin, I count 32 separate categories. I couldn't tell you the difference between them to save my life. Strangely, their annual report insists this is a winning strategy, and plan to increase the number of lines they offer. Romances used to be broadly divided in categories such as modern, historical, paranormal or sci-fi, Christian (no sex) etc. Well those old categories as so passé.

Meanwhile, romance authors complain that the once extra-tight guidelines are getting a tad ridiculous. I leave you with the writing guidelines from the Silhouette Desire series:

At 57,000 words, Silhouette Desire books are filled to the brim with strong, intense storylines. These sensual love stories immediately involve the reader in the romantic conflict and the quest for a happily-ever-after resolution. The novels should be fast-paced reads, and present the hero and heroine's conflict by the end of chapter one in order for the reader to understand what obstacles will impact the characters for the remainder of the novel.
The Desire hero should be powerful, wealthy — an alpha male with a sense of arrogance and entitlement. While he may be harsh and direct, he is never physically cruel. He is capable of being saved and it's up to the heroine to get him there. The Texan hero should own the ranch, not work on it, and the urban hero should be the company CEO, not a handyman.
The Desire heroine is complex and flawed. She is strong-willed and smart though capable of making terrible mistakes when it comes to matters of the heart. This is primarily her story so much of the book should be from her point-of-view. There is room for the hero's perspective as long as his thoughts are centered on the heroine and their conflict. Instead of dividing the novel equally between both protagonists' points-of-view, Desires should be more 60% heroine and 40% hero.
The conflict should be dramatic with such classic plot lines as revenge, secret pregnancies, marriages of convenience and reunion romances. Plots which focus on suspense, paranormal or character-driven concerns are best directed elsewhere. The story can be set anywhere in the world, but the tone should be true to the author's voice.

Wow, that is awfully specific.

Posted by Ginna Dowler
(Cross-posted to Gin and Tonic)

Instapundit links to this NY Sun editorial calling for automation in the NYTC system.

Already, trains in Paris, Cairo, and Calcutta operate with computerized or automated systems. In Paris, the Meteor Project was launched in 1998, with an automatic piloting system that controls the train line’s traffic, regulates speed, manages alarm devices, and allows for traffic of automatic and traditional conductor trains on the same line. There have been no serious accidents reported since this system deployed in the late 1990s, and more than a billion people have been transported. Computers make the trains run on time and they don’t threaten to walk off the job. All of us are replaceable, but some are more quickly replaceable than others.

Ahem. Since I know a little something about Computer-Based Train Control (CBTC), I will comment on how wrong this is.

First off, New Yorkers do not have to look to Calcutta to find CBTC in action - they only need to look as far as the JFK Airport. Airtrain is as automated a transit system as they come - completely driverless. (It's a Bombardier Mk II Linear Induction Motor vehicle with an Alcatel SELTRAC Automatic Train Control system, if you must know.)

But it is still entirely and completely dependent on unionized workers to make the system run. Believe me, I know. (1) Automation will not solve the labour problem. You still need maintenance personnel, train conductors, operations specialists, and without them, the trains do not move.

Actually, there are really only two arguments for automation - safety and service speed. Automation increases the safety of the system, because the single greatest cause of accident is driver error. (This is not because drivers are incompetent, but merely because they are human.) Furthermore, train safety analyses are easier and more predictable if you can minimize the dreaded human error factor.

Headway, or the required space between trains, can be reduced with an automated system as well, increasing service.

So could the NYCT make use of CBTC? Yes and no. Several trains have systems on board, but the stations, guideways and infrastructure is not in place to accomodate wide-scale implementation, and it would be very expensive (i.e. billions of dollars) to make it happen. The L trains are already out-fitted with CBTC, and my understanding is that with management support they are running with limited service.

Eventually as wireless technologies become more secure and sophisticated, the implementation of CBTC will be more feasible.

But it still won't help with the strike threat. You can't remove humans from this equation entirely.

Posted by Ginna Dowler

(Will eventually by cross-posted to Gin and Tonic.)

(True, if tangential, story: Last winter I was at Airtrain doing a software upgrade for our equipment - a procedure which had to be done over night. After 5 nights, I only had one train left to upgrade. Operations agreed to bring the train in if maintenance would send one more out. There was a train ready and waiting in the shop. To get them out into the yard, you collected some workers and pushed the train out the door until it hit a powered rail - not as hard as it sounds, as the bearings make the train easy to move. But I could not collect enough people to push out the train, and the shop supervisor kept shrugging his shoulders and telling me it was a Union shop, so what could he do. My plane was leaving in the morning, and as the hours ticked by it seemded more and more likely I would have to stay another night just to get this one car. Consumed with rage, I started pushing. Now, I am not a big woman, but damned if I didn't get that puppy moving. All of a sudden I was surrounded by big guys shouting at me, but they did push out that train, and I made my flight.)

I've been following the NYC Transit strike with interest. I think it's hard for many of us to imagine the scale of such an event, but one comparison I like to make for Canadians is that the NYC Transit Authority is larger than the government of Ontario.

The NY Times has been all over the story naturally. To be honest, although I'm not usually a big supporter of labour, where the complaint is working conditions I see the union's point here. The front-line workers do have difficult conditions, and they deal first-hand with security threats. In fact, one of the chief complaints from transit workers that I used to hear is that the operators and conductors are now considered the front-line in the anti-terror war. The are expected to watch passengers for suspicious behaviour, and make the decision to call in police or other security. On the other hand, they will be blamed if it's a false alarm and causes a delay in revenue service. I'm not actually supporting the TWU-local 100 strikers, but having seen their working conditions first-hand, they have a far more legitimate beef than say, the BC teachers ever did.

What's most interesting for me though is how little support the union is getting from other organized labour groups, most importantly their own parent organization. The local union is in serious trouble with penalties, and even considering selling their building to cover costs. The union is facing fines up to $1 million a day, and they only have $3.6 in cash. From that they have to also pay strike wages. They don't even seem to be getting support from left-wing bloggers.

Maybe I'm cynical, but it seems to me that the level of support for a strike has nothing to do with the issues involved, and everything to do with the level of inconvenience it causes locals.

Posted by Ginna Dowler

(Cross-posted to Gin and Tonic)

I've spent the last three weeks taking an incredibly intensive course for budding entrepreneurs. I call it business boot camp, and it was easily one of the best courses I've ever taken, including anything at University. One of the first things our instructor told us was that as prospective founders, we had to take responsibility for how our businesses progressed, or didn't. "It's all your fault" he told us. If your business fails, it won't be because of your competitors, or mysterious market forces, or your clients, or the weather, or your employees - it will be all you. You will have failed to adapt, failed to respond, failed to innovate.

With that in mind, I read a good serious of articles over at Fast Company documenting how Walmart is mean to their suppliers, and often drives them out of business. In a companion piece entitled "Ten Steps to Turn Around Walmart", another author argues is that Walmart is struggling, which I'm not sure I believe, and that among other things, they should be nicer to their suppliers.

I don't know if Walmart is struggling. Their share price is lower than at many points over the last five years, but on the other hand, growth and sales are both strong.

But the issue of Walmart's behaviour to their suppliers is what interests me. The Fast Company article documents the sad story of Vlasic Pickles, who are struggling now because of Walmart.

Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat." Hunn recalls things a little differently, if just as ominously: "They said, 'We want the $2.97 gallon of pickles. If you don't do it, we'll see if someone else might.' I knew our competitors were saying to Wal-Mart, 'We'll do the $2.97 gallons if you give us your other business.' " Wal-Mart's business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.

The story is that Vlasis, a premium pickle brand, agreed to sell a gallon jar of pickles in Walmart for an absurdly cheap price. What happened is fairly predictable. Why would conumers buy a small jar for $3.00 when they could get a gallon for the same price? Yet the margin on the gallon jar was incredibly thin, so despite the increased volumes, the pickle maker took in less and less, especially when you factor in Walmart's insistence (stated up front) that suppliers lower their prices each year. So are Vlasic's troubles really the fault of Walmart?

Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy--although the gallon jar of pickles, everyone agrees, wasn't a critical factor.

So if the gallon jar wasn't a critical factor, what was it? The point here seems to me that the Vlasic management team made an incredibly stupid move in agreeing to the gallon pickle jar anyway. Once again, it was all their fault.

The article then goes on to discuss the tale of Levi Strauss's entry into the Walmart fray, which seems like a company-killing decision to me. The short version is that Levis has been struggling over the years because of competition from low-cost brands at, of course, Walmart. (In reality, the demand for premium jeans remains strong, but Levis has failed utterly to hold that market.) So now they are diluting the premium brand by selling a cheaply-made and cheaply-priced version through Walmart.

I will make a prediction: In a few years, Levi Strauss will file for bankruptcy, and blame their failures on Walmart's rapacious supplier management. There will be much sniffing in the mainsteam press.

And people will continue to buy cheap clothes at Walmart so they can have enough money to buy one pair of DKNY or other premium brand jeans - just not Levis.

Posted by Ginna Dowler
(Cross-posted to Gin and Tonic, where comments are enabled.)

You know where I stand on public and private sector unions. The discussion continues here. One thing is abundantly clear, unions are exactly like universal child-care programs (see post below). They both are relics that share two key traits: negating the rights of the individual and eliminating choice.

It's not looking good for Schwarzenegger and those who support curbing union power. If you want to know the background to the importance of this issue, visit the Economic Freedom archives.

Lots more on the Califorina elections here.

Thanks to all of you who wrote or expressed an interest in, or suggested some links, about the teacher’s strike (or shakedown), which thankfully is over now. It is of course, not a local issue, hardly. It all comes down to economic freedom and that’s the category where I’ve put the many posts that dealt with the issue, so take a look there if you’re interested in (re)reading them. That interest taught me something as well, most importantly that the same problems are prevalent in the US, something which came as a bit of a surprise to me. One reader in Washington state observed:

We’ve been watching the BC teacher strike with great interest here in Washington state. In 2003 we had a district go on strike for 49 days – the longest in state history – despite clear precedent that teacher strikes are illegal. This year at least 5 local education unions threatened strikes in order to wring compensation concessions from the district negotiators. No elected officials were willing to challenge the union’s tactics.

And would that be because of the dominance of one party in that particular state? Or could it be that unions have such a hold on public opinion that parties from either side are reluctant to take on so obvious a problem? Or could it be that the social and economic make-up of places like Washington State and British Columbia produces a particularly perverted style of politics? Consider what James Na, of the excellent Guns and Butter blog and a former Seattle resident, has to say about it:

Alas, I think Seattle, like Vancouver, is following the San Francisco model, where the warped policies are turning the city into an enclave of rich, active retirees and the young, beautiful people crowd in a sea of poor, badly-educated underclass (including proliferating vagrants). Meanwhile, expensive real estate, lack of wide-scale industry and poor public schools force the middle-class out.

And if the middle class votes with its feet, then the market for simple and compelling free market thinking stands a good chance of evaporating for good. But hey, you got clean air and great views so who cares?

The debate on public schools continues. A reader - who has all the time as he's grounded by Hurricane Wilma - writes:

Surely the government knows what needs to be done? The answer is that the targets are set by the state Department of Education, and/or a Federal judge. And when you have only one group of people determining the course of education in a state, you are in essence putting all your eggs in that one DOE basket. How does the state DOE determine the targets? By consulting academic pedagogues, their own specialists, and, of course the relevant committee jurisdictions within the state legislature. The result is a set of standards that, no doubt, reflect the thinking of academics and legislators, but not necessarily the needs of the students. Notice, in the end, it is actually a VERY small group of people who are deciding what the "needs" are, and, therefore direction of EVERY school district in the state will be.

The upshot is that performance targets, to work in the schools, can only work if one can say: " We have carefully and truly identified the unmet needs of our customers (the student), and based our targets on those needs. Because of that, we can be sure that the targets will orient our investment, our workforce, management (administration) and the entire organization toward meeting those needs. If we have somehow misjudged what the customer truly wants, we can be sure we will receive feedback immediately in the marketplace, and we will, in such a case, immediately reassess and reorient our efforts to align with our customer's wishes"

The tragedy is, the energy and creativity of the teacher, the one person in the education supply chain that truly can see, and remedy, unmet needs in their students, is thwarted because of the package tour "if it is Tuesday, we must be studying statistics" approach guaranteed by a state-mandated curriculum.

Judging from some of the reactions I want to reiterate that I am not advocating a wholesale privatization of education, something that would be politically unpalatable in any jurisdiction. No, a public system should be needs driven, accountable and give parents and students options when it comes to making choices. These factors in turn should help to introduce some performance related targets for schools which should help in giving teachers a more market-based incentive scheme rather than the year-on-year blanket increases, enforced by unions, regardless of performance.

That is exactly where western democracies have been moving in recent years (note the emergence of school vouchers and the willingness of parents to go private if they don’t like what they see) and it is precisely this scenario that public sector unions fear so much. That’s been the key motivation behind the recent British Columbia teachers strike and the excessive militancy displayed by their union. It was all driven by the acute awareness that this could be one of the last chances to try and salvage a crippled and inefficient system that had benefited them for ages and which therefore should be preserved at all cost. Even if a portion could be saved from 21th century realities, then it would be worth the damage and inconvenience to parents and students alike. That’s also why the real issues where obfuscated and why the unions pushed forward a series of myths, all of which are succinctly debunked by Erin Airton.

Yet, there were few, if any, media outlets that were willing to look beyond these myths – apart from a few conservative bloggers and columnists - and consequently the union was able to retain a significant measure of public support, as some poll numbers indicated. Fine, but the blame for that rests not just with a heavily biased media, but also with a government whose ability to engage the public and drive its economic policies forward in a credible manner faltered hopelessly. As a consequence, it has been a baffling experience to listen to hardworking middle to higher income earners in the private sector who are serving up some of the talking points prepared by the union. Or who fail to make the crucial distinction between teachers and the radical union that claims to represent them. But some have taken action and with the help of the Canadian Taxpayers Federation are now suing the teacher’s union, the BCTF, for the failure to provide services. It's an important move that deserves respect, highlighting that there are committed people in Canada that are willing to stand up to the left's bullying tactics.

In summary, the immediate tasks ahead are to find to creative ways in ensuring that an excellent public education system meets the needs of a new economic era, while forcefully taking on the dark forces that seek to prevent such a natural move forward.

UPDATE I: It's over, finally.

UPDATE II: This is just hilarious, a union picketed by its own staff:

The school year has begun, but the Washington Education Association’s (WEA) labor battles are not over. In a strange bit of irony, the state’s largest and most powerful union is embroiled in a bitter dispute with its own employees over wages, benefits, and other employment policies. That’s ironic since its local affiliates habitually threaten individual school districts with illegal public sector strikes on a regular basis.

(...)

Apparently the WEA understands the importance of “fiscal responsibility” when it comes to its own bottom line, but could care less about the struggles facing local school districts or the taxpayers of Washington.

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We’re in the final stages of the teacher’s strike it seems, now that both sides have accepted the recommendations of the mediator and the courts have fined the teacher’s union BCTF half a million dollars for their contempt of court:

Justice Brenda Brown of the B.C. Supreme Court said she based the amount of the fine on the fact it appears the teachers are about to return to work. She said otherwise the fine would have been "very significantly larger."

It’s a somewhat questionable ruling as of today there is no absolute certainty that the teachers will indeed return to work, as the union will vote over the weekend. It appears to be a small amount (around 4% of BCTF’s net cash position) especially given the fact that the striking teachers did breach – and continue to breach – the law for a period of two weeks. If the judge feels the imminent end justifies a lower fine than maybe there should been a conditional fine on top of the one she has just given. Still the judge made a very crucial point:

She said there are two misconceptions regarding the contempt -- that the teachers were defying an unjust law and that citizens have the right to breach a court order in defying an unjust law. "They do not," Brown said.

This outcome as well as the union’s “reluctant recommendation” to its members to accept the mediator’s recommendations point to an end of the conflict. And while organized labor and some media will do everything to spin the final outcome, it will be a government win which, given the illegal nature of the strike, was almost a given from day one. In fact, as The Shotgun points out, by foregoing pay during the strike, the teachers have essentially funded the compromise that is now on the table.

So, from a broader perspective was the disruption to the educational services worth it? Hardly. Although the unions lost it is absurd that a full two weeks were needed to arrive at this obvious point. Given the mixed public reaction it remains to be seen whether the people of British Columbia – as voters the ultimate arbiters - understand the need to reform provincial education and take a decisive stand against militant employee groups that benefit from antiquated and illiberal labor laws. While the Campbell government has taken a commendable stand, it hasn’t really been able to get its message across more effectively. You have to be able to communicate with the voters about the need and rationale for steady reform. Granted, the local media are deeply biased as even the more neutral outlets always take care in not offending or otherwise criticizing the unions.

The initial assessment is that after two weeks of closed schools, we have seen relatively weak court rulings, an overly careful media reaction and two battling parties who as a result are prone to lock horns again in the not too distant future. If it was really all about the children and the law - my position - then there should have been a far more direct approach from both the courts and the government. As for the BCTF, their intentions were clear from day one, it was about everything, but not the children.

Related:
Well, in Washington State they don’t need the government to get rid of unions with questionable political motives. In the Sprague-Lamont School District the teachers voted to decertify their union:

"because teachers were fed up with annual dues of nearly $700 per teacher, much of which was used by the W.E.A. to further social and political agendas they found offensive"

Howard at Oraculations updates us on the potential for the deal between the United Auto Workers and GM to fall through, and interestingly, the financial crisis in the municipality of San Diego caused by intransigent public sector unions. It seems that, in both the US and Canada, organized public employees are the last bastions of labor radicalism. It's probably easier to bully the taxpayer when you're providing an essential service than asking a consumer to buy an overpriced car to fund your retirement plan.

The teacher's strike continues and the rhetoric from the union leadership is increasingly becoming unhinged, more evidence that rational behavior is probably the last thing one can expect from this teacher's union. Mark Milke, one of the better local pro-free market commentators sums it up in one excellent column.

UPDATE: There are people googling "Jinny Sims = Castro" and end up here. Sims is the teacher's union leader and she loves historical analogies, alluding to Mahatma Gandhi in one recent interview, while teachers on strike invoked Mandela, Parks, and in an act of total ignorance, Walesa. Again it underlines the totally inept rhetoric that is supposed to support the strike, and in my view it is indicative of the quality of the political debate in British Columbia. The average citizen here – both those on the left and the right – are clueless about what is at stake, the historical context, or the economic dynamics. It’s similar to my native Holland: turn your back on it, and hopefully it will go away, it’s not really my business. It’s a pathetic attitude that produces very mediocre results and terrible political discourse.

Of course, Sims can’t even stand in the shadow of any of these great political and civic leaders. She comes across as someone from the lower ranks of her organization who with a bit of media talent, some incendiary rhetoric and hard-handed tactics secured her position, a process all too typical of far-left or far-right movements. No visionary material at all. Sims immigrated to Canada in the mid-1970s from Britain, so she totally missed the Thatcher revolution and its decisive impact on organized labor, and from that perspective she is truly a political anachronism. In British Columbia there’s a huge market for that sort of talent. With that in mind we do indeed have to go back some decades to find appropriate historical analogies and Castro may not be that far fetched at all.

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The school boards and the unions were back in court today, but it won’t be until Friday when the judge will rule on penalties for the errant teacher’s union, the BCTF. In the meantime the appointment of a mediator was announced in what some conceive to be a sign that the government may not be as unyielding as they have positioned themselves to be. Ginna Dowler doesn’t think so, and makes the compelling argument that the Campbell administration has all the time in the world to wear the union down as its election victory is only a few months old. I hope she’s right.

The emergence of a facilitator may get the parties talking and if the judge abets this process with another ruling that lacks teeth, we may end up with a compromise which no doubt will be hailed as a union victory. Sure, it will get the children back in school, which is good, but the opportunity to really damage militant labor forces will have suffered a setback. Still, it’s too early to draw conclusions, so stay tuned.

The LA Times comes out in favor of Proposition 75 (via Sullivan) and makes a very important point:

Proposition 75 opponents argue that this is unfair because there is no similar move to curtail the discretion of business lobbyists to invest shareholder resources in politics. But the analogy is flawed, given that this initiative applies only to public employee unions. It's not private businesses that sit across the negotiating table from public employee unions; it's the taxpayers and their elected representatives, acting as stewards of the public interest.

If this notion sounds almost quaint, it is, because it has become so divorced from reality. At many levels of government, public employee unions, aided by their political war chests, have gained control over both sides of the negotiating process. When public employee unions wield the type of influence they now do in California, too much governing becomes an exercise in self-dealing.

British Columbians, take note. As I've mentioned before, the demise of union power - especially the public sector variety - is global.

The answer to the question is of course self-evident for those of you who have been following this saga unfold in several episodes: it’s a shakedown, and a hard one at that. Union claims that the curriculum of the affected children will not suffer are just not sustainable after an illegal shutdown of educational facilities for a full seven days. In fact, they’re an affront to parents and children alike.

The provincial government weighed in today with the appointment of a special prosecutor who will have to determine if the teacher’s union should face criminal contempt charges. And while the union continues to lament the hard-line approach by the local government, it doesn’t seem to be hard at all according to its leader, Gordon Campbell:

"At the end of the day, it is hardly a hard line situation to say people should respect the law. The fact of the matter is, in a civil society, we must obey the law."

Unions should be lucky that Campbell is their opponent. While his approach has so far been unyielding, he hasn’t stated the obvious, namely that public education is broken and that new solutions – decentralization, school vouchers and other market mechanisms – need to be considered. As much as the teachers owe it to the parents and children to get back to work, the government has a fiduciary duty to the taxpayer to ensure it is no longer forced to pay for an education system that breaks down in pieces the moment some left-wing militants get it in their heads that it’s the 1970s all over again. It’s a simple truth that very few stakeholders have figured out yet, but it is simply unavoidable. If that’s the long-term plan Campbell has, then this ugly battle may be the first and necessary installment in a journey to better and freer education. Let’s see how quickly the special prosecutor will move.

NOTE: There’s quite a bit of interest from readers based in Washington State, one of whom was kind enough to send me a link to the Evergreen Freedom Foundation with a list of their teacher’s strikes, their respective duration and resolutions going back to 1972.

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UPDATE: A reader from Florida e-mails the following:

The classroom teacher, here, has the same responsibility for results - making things work - as entrepreneurs do in small businesses, or, to perhaps use a more apt analogy, as lower-level managers do in large corporations. I would argue that such a mindset is not apt to produce a militant union mindset, but quite the opposite; and management (the school board) gets the best of both worlds: labor force stability (contracted labor), with a single compliant union head (or negotiating team) to negotiate with the school board. Here, they just got a 20% increase in class load, for a less than 10% increase in payroll.

The legalized extortion your B.C. teacher's unions engage in simply doesn't happen, in this particular school district. But in both
cases, the unions have a net negative effect, and a change in labor laws to strict neutrality - not requiring or facilitating union formation, would be much better than the status quo.

This Floridian case shows that some middle ground and less adversarial labor relations are possible within a public setting.

The teachers strike here continues and is now attracting attention from various readers who have e-mailed and asked for updates in light of the unprecedented ruling that a British Columbia Supreme Court judge handed down yesterday.

To recap: the government legislated the teachers back to work, the strike was ruled illegal by the courts last weekend, the labour relations board confirmed that fact a few days ago in a separate ruling and yesterday everyone was expecting that during the penalty phase the judge would hand out some hefty fines to deplete the union coffers. The militant teachers union had anticipated this and maintained adequate reserves, so the ultimate ruling in which the judge did not fine but froze the union’s assets came as a thunderbolt on a clear day for a deeply perplexed union. The bottom line: it prevents it from paying strike pay and accepting funds from third parties to do so. Apart from neutering its ability to strike, it has given them a “way out” to end the strike without losing too much face, or so the argument goes. The unions remained very quiet today – still not sure what hit them – but nevertheless ordered a continuation of the illegal strike. Other unions may join later and launch a massive protest next week. To be frank, it’s not a pretty spectacle and it is increasingly reeking of anarchy.

As it happens I have just started reading Tammy Bruce’s The Death of Right and Wrong and the teacher’s strike here is another excellent example of the book’s theme: the way in which the Left has forced our society to abandon concepts of right and wrong and how it has succeeded in doing that with the help of a number of compliant institutions, most notably, the media. The situation here this week is really no exception and this morning I explained to the head teacher at our local school – who by virtue of her managerial role is not on strike – why this no longer is an issue about money or class size (the apparent action items that are driving this strike) but about what is right and what is wrong. Ignoring a pre-agreed conflict resolution mechanism and following it up by contempt of court would land you and me in jail, but organized labor is undeterred, raises the stakes unhindered and somehow gets away with it.

The teacher’s union has deliberately chosen to ignore a court order under the guise of claiming that it is not a strike but “civic obedience”, a warped theory that is also used as a rebuttal to those who argue that it is disgusting to draw young children in what is increasingly a political battle. Yet, the teachers can count on large pockets of the media that dutifully report that parents are supporting the strike and that teachers have a right to illegally picket schools and daycare centers as it will teach children the values of civic protest. Even Martin Luther King and Rosa Parks have made surprise appearances on billboards in order to bolster the case of a thuggish union. It’s amazing what people can come up with, and it’s even scarier how many eat it, accept it and celebrate it.

The union is also banking on parents to stay quiet or even support their actions on the premise that no one wants to upset a teacher that has responsibility for their kid in class. Well, that is probably the best reason to not stay quiet and speak up. As an example, this from an e-mail I got last week:

Last year the kids were reading a book called "The Wave" which dealt with the concept of totalitarianism. The teacher then had the kids make collages with pictures of totalitarian rulers. This was in November right after the US election. Some of the kids made posters with pictures of Stalin, Hitler and George W Bush. The teacher was a real Bush hater and permitted this and in fact displayed the posters. Well, I was pretty upset, as I didn't want my son to misunderstand what totalitarianism is. I also found it funny that Fidel Castro was nowhere to be seen on these posters. My son made me promise that I wouldn't say anything, as he is really concerned about his grades, so I had a third party complain and the posters came down.

If a generation of children here is being educated by a militant union that has lost the moral compass to make a distinction between right and wrong and incites its members to ignore court orders than maybe parents do need to speak up to fix a system that is badly broken. And not only parents are made to cower in silence, teachers who have every right under the current law to disobey orders from the union are threatened, union leader Jinny Sims made that pretty clear earlier this week:

She says there will be consequences for teachers who cross BCTF picket lines – noting that they have to live in their communities and they will still have to work with people who are currently picketing.

Sims of course will not publicly acknowledge the fact that her mandate to strike was given to her by less than 50% of her members, contravening a law adopted by the elected provincial legislature, a labour board ruling, and to top it off, a court order. Once more, to get an idea of what we’re dealing with, this was also the union that last year adopted a motion that called on Israel to dismantle its security wall, in a highly selective and bizarre excursion into foreign affairs.

Some of you have pointed correctly to Reagan and PATCO and wondered why the British Columbia government has not resorted to firing all the teachers. The answer is that the air traffic controllers back in 1981 were clearly in violation of their contracts which is something that may not necessarily be the case here and equally important, it would be too much of a political gamble for the current government. The outcome however would not be as different as the likely outcome if the union backs off: a workforce where union power is sharply diminished.

No free society can suffer the indignity of labor relations skewed in favor of one highly organized protected group that will not hesitate to flaunt the law and resort to street rule. Any democracy that gives in to that is perilously close to its own extinction. Both Reagan and Thatcher in the 1980s understood that when they took on the forces that stifled freedom, growth and progress in Britain and the US. Present day union leaders who lament the treatment they are getting from the government and the courts in British Columbia should for once reflect on what really happened to the societies that crushed union power. They became wealthier and freer across the board.

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UPDATE: Some interesting thoughts here.

One of my readers weighs in with the argument that it is education that is ultimately responsible for creating a generation of citizens that is totally unprepared for the contract society which I described below. Well, that takes us back to the striking teachers doesn’t it?

How can we expect a system where teachers illegally throw down the gauntlet to get their hands at 1970 style benefits to prepare children for a world where there probably will be far less, if any? But as my reader goes on, it’s not just the teacher; blame can equally be apportioned to the parents:

You talk about the expectations of the unions. Unfortunately, that air of unreality is deeply imbued across society, the idea that somehow one need not plan for the future, particularly concerning learning a profession.

In the US, we have to totally change the system in which children are educated and brought up - no responsibility, very permissive child-rearing, no responsibility for learning in the schools; you get the flavor of it. (See Michael Barone's latest book).

The elected school board, here, seems to be the root of the problem; they are scared to death of antagonizing the laissez-faire style parent by making school rigorous. Surprisingly, the parent problem seems to be as large in the high schools in affluent neighborhoods, as in the poorer ones - many of the parents in the richer areas have great careers - such as real estate sales - in spite of weak knowledge of the disci