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The Value of a Twelve Million Dollar Man

Imagine you’re a General Manager assigned the task of assembling a winning National Hockey League team.

Would you pay two players $12 million each to produce 100 points (goals plus assists) in the 82-game regular season? Or would you rather pay four players $6 million each to produce 50-60 points in a season? Or would you pay eight players $3 million each to produce 25-35 points in a season?

As a General Manager (or GM) in the current NHL, those are the kinds of questions you would have to wrestle with.

Under the current salary cap, an NHL team can pay its players no more than $81.5 million in a season. Since each team has a maximum of 23 players on its roster, that means that the average player gets a salary of about $3.5 million. However, it is not quite that simple. For technical reasons (contracts bought out, salary retained from players who have been traded, etc.), most teams are paying a little of that $81.5 million to players who are no longer playing for the team.

Furthermore, player contracts are negotiated based on what a player is expected to produce or what the player used to produce, not on what a player actually produces. All teams have some players who produce less than they are being paid for—such as a $6 million player who produces only 20 points a season. Most teams also have players who produce at a higher level than expected. This is especially true of younger players. The NHL agreement with its players limits the salaries of new players in the league to about $1 million per season for their first three years. It is not unusual for one of these players to produce 50-60 points in a season.

Regardless, the basic question remains: What mix of players should a GM assemble for his team. Should he assemble players with similar levels of skill and pay them all $3.5 million? Or should he assemble players with different levels of skill and pay some players more and others less?

Higher paid players are often expected to play more minutes per game; therefore, per minute, the salary difference, while still large, is not as large as it might seem at first glance. On the other hand, playing more minutes brings the risk of burning out the $12 million player.

Now let’s look further at that $12 million player. Every GM seems to want one or two of them. That is why they jockey to get a top draft pick, hoping that a young player will develop into a $12 million player. And that is also why they offer huge contracts to free agents.

But is that the best strategy?

If your team is behind by a goal late in a game, you would surely want to have one of those $12 million players to put onto the ice to try to score a goal and tie the game up. But putting so much emphasis on one player (putting all your eggs in one basket, so to speak), can leave you vulnerable. If that player is injured or the other team puts enough focus on preventing that one player from scoring, then your team might be left with no other options.

Also consider this: The more $12 million players a team has, the fewer medium-priced players it is likely to have. There is a limited amount of salary money to go around. The result might be a team that has great strengths in one area and great weaknesses in others. For instance, if the top forwards are paid more, the team’s defence might be weak. Or the first line might be great while the other three forward lines don’t score very much (in hockey parlance, the team lacks secondary scoring).

Let’s look at some concrete examples. In 2018-2019, the highest paid player was Connor McDavid of the Edmonton Oilers at $12.5 million. (For the purposes of this article, I am using the “cap hit” or average annual salary.) The Oilers also had Leon Draisaitl at $8.5 million. McDavid did his part, producing 116 points, the second highest total in the league, and Draisaitl finished fourth with 105 points. However, the team only had two other players being paid over $5 million. The team finished 25th in the 31-team league.

The Toronto Maple Leafs had two players in the top six mostly highly paid players: Auston Matthews at $11.634 million and John Tavares at $11 million. Matthews produced 73 points (while playing in only 68 games due to injury) and Tavares 88 points. The Leafs had only three more players being paid over $5 million. The team finished 7th, but tailed off in the second half of the season and lost in the first round of the playoffs. In the upcoming 2019-2020 season, the Leafs have three players in the $11-$12 million range, making up three of the seven highest paid players in the league. Their top two lines are likely going to score a ton of goals—and they will have to because the Leafs’ bottom two lines aren’t likely to score many at all.

At the other end of the spectrum, the top player on the Tampa Bay Lightning, Steven Stamkos, was paid $8.5 million, and five other players were paid over $5 million. The Lightning were by far the best team in the regular season, but lost out in the first round of the playoffs.

The highest paid players on the Calgary Flames were Johnny Gaudreau at $6.75 million, Mike Giordano at $6.75 million, and Gary Monahan at $6.375 million. Two other players were paid more than $5 million. The Flames finished second in the regular season and also lost out in the first round of the playoffs.

The highest paid player on the Washington Capitals was Alex Ovechkin at $9.538 million. The Capitals paid eight other players over $5 million. They finished fourth in the regular season but lost in the first round of the playoffs.

The highest paid player on the Boston Bruins was David Krejci at $7.25 million. The Bruins paid six other players more than $5 million. The Bruins finished third in the regular season and were the second best team in the playoffs, losing in the Stanley Cup final.

The highest paid players on the St. Louis Blues were Vladimir Tarasenko and Ryan O’Reilly at $7.5 million each. They produced 68 and 77 points respectively. The team had seven other players paid over $5 million. The Blues finished 12th (tied with two other teams for 10th) in the regular season but had the best record in the second half of the season and eventually won the Stanley Cup.

Also consider this: Of the 12 players paid $10 million or more, seven played on teams that did not make the playoffs.

Hockey is a team game. The best strategy to have a winning team does not seem to be to acquire one or two $12 million superstars. Rather, the best strategy seems to be to have a cluster of very good players in the $5-$8 million range.

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Why the Federal Government Deficit Matters to You

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When most Canadians look at a federal government budget (or a provincial government budget), they look to see what is in it for them. Is there some new program or subsidy or grant that will benefit them or their children? Is the government going to provide a home ownership grant or a child daycare grant or an increase in government pensions or even a new highway to their community? They also look at taxes. Is the government going to increase (or decrease) income tax rates or sales tax rates or impose a new tax on alcohol or gasoline or something else?

It seems that most citizens look at elections the same way. They focus on what promises the various parties have made that will benefit or harm them individually and then often use that information to determine who they will vote for.

But most citizens never look at the bigger picture, the overall budget and whether the government is projecting a surplus or deficit. Most citizens assume that is not their problem. That is a problem for the government or the politicians or someone else to solve.

They are wrong.

How wrong are they?

That is not easy to answer. It takes extensive digging to discover the facts. For instance, the 2019 budget presented by the federal government last March 19 was a 460-page document, but it contained very little factual data on government spending. It was a philosophical treatise full of vague generalities such as “investing in the middle class,” “building strong communities,” “building a nation of innovators,” “advancing reconciliation,” “delivering real change,” and “advancing general equality and diversity.” It said very little about what is actually being spent and on what. No company would ever get away with such inexact financial reporting. Shareholders (not to mention government regulatory agencies) would never allow it.

It takes a fair amount of diligent research into other government documents and non-government studies to ferret out the facts. (One would almost suspect the government does not want Canadians to know what is going on.)

The Bottom Line

Here are some of the facts.

Four years ago, Justin Trudeau was elected promising to run “modest deficits” (of less than $10 billion a year) for a couple of years and then balance the budget. Those modest deficits turned out to be closer to $20 billion a year: $17.8 billion in 2016-2017, $19 billion in 2017-208, a projected $18.1 billion in 2018-2019, and a projected $19.6 billion in 2019-2020. Those add up to $74.5 billion. (The Parliamentary Budget Officer has since reported that the actual deficit for 2018-2019 was a little lower and the deficit for 2019-2020 might be a little higher.)

That $74.5 billion is on top of the $600 billion or so in deficits previous federal governments had already accumulated. And Justin Trudeau is now promising to add another $93 billion in further debt over the next four years if his Liberal government is re-elected. And the New Democratic Party and Green Party are promising even higher levels of spending, which might result in even higher levels of debt.

But let’s ignore that for now. Let’s just look at the $74.5 billion in new debt.

Where did the government get the $74.5 billion? The answer is that it has borrowed that money from Canadians and from non-Canadians, anyone it could find willing to lend the money. Just like anyone else, when the government borrows money, it has to pay interest on that debt—and the interest payments can come from only one source, the Canadian taxpayer.

Now let us look again at that $74.5 billion. Given that there are about 37 million Canadians, this means that the increased government debt incurred by the Trudeau government alone amounts to about $2,000 for every Canadian ($74.5 billion divided by 37 million citizens).

Canada’s total accumulated debt amounts to over $18,500 for every Canadian, but let’s just talk about the debt incurred under Justin Trudeau.

The government reports that it is paying about 3.5% interest on that debt, which is a pretty favourable interest rate. In fact, it is a historically low interest rate, and the rate will most likely be higher in some future years. That means that the annual interest on the Trudeau government’s debt currently amounts to about $70 for every Canadian ($2,000 X 3.5%).

That means that next year, you are going to be paying $70 in taxes to the government to cover the interest on the debt incurred over the last four years. For that $70, you are not going to get anything at all. No roads, no schools, no hospitals, no police protection, nothing. It is like taking $70 from your pocket and burning it.

It gets worse. You are also going to have to pay another $70 the next year. And the next year. And the next year. And every year after that for the rest of your life. And your spouse is going to have to pay $70 a year for the rest of his or her life. And so is each one of your children. And your grandchildren, and your great-grandchildren. The debt will go on forever.

And that is assuming that the Canadian government never runs another deficit and always balances the budget every year from now on. The debt will still go on forever.

Unless, that is, we decide to pay it off. So, next year, let’s all agree to pay an extra $2,000 each to the government and pay this thing off. Don’t forget to kick in an extra $2,000 for your spouse and each of your children.

Too much? Okay, let’s pay this off a little more gradually. Let’s all pay $140 a year instead of $70 (and don’t forget to add another $140 for your spouse and $140 for each of your children). Remember this is $140 for which you will get absolutely nothing. No roads, no schools, no hospitals, no police protection. Nothing. It will all go to pay off the debt, including interest. Will that work? Sure. But it will take about 15 years. Can you afford that?

Remember, also, that every dollar the government spends on interest is a dollar that it does not have available for roads and schools and hospitals. In 2017-2018, the federal government paid $21.9 billion in interest on its accumulated debt. In 2019-2020, the government is expected to pay $26.2 billion on interest. And the amount is expected to continue to rise every year in the future unless something changes. Think about how much good the government could do with $26.2 billion if it wasn’t wasting it on interest payments. Think of the new programs that could be implemented. Think of the taxes that could be reduced or eliminated. (If it were not for interest payments, the government would be running sizeable surpluses every year.) Think of what you yourself could do with that extra money as a result of the lowered taxes.

Let Someone Else Pay

Now perhaps you are saying that you don’t make that much money, you pay very little (or even nothing) in income tax every year, so you will not really have to pay your share of the debt anyway. Let the government tax the rich or tax big companies. Let them pay for your share of the debt.

But you are forgetting about sales taxes (remember the GST?) and levies such as carbon taxes. You pay taxes on almost everything you buy. But it gets worse. There are also hidden taxes on some goods (such as gasoline). And don’t assume that the taxes that big businesses pay will have no effect on you. Companies pay payroll taxes for their employees and sales taxes and carbon taxes and import duties and various other fees and licenses. There are taxes on everything companies produce, import, transport, or sell. How do these companies get the money to pay all those taxes? By raising the price of the goods and services they sell to you. There is at least a slice of tax embedded in everything you buy. You are going to pay. No matter how you try to avoid it, you are going to pay.

Keynesian Economics

Now, you may ask: Isn’t there some theory that says it is sometimes good for a government to run a deficit in order to stimulate the economy?

You are talking about something popularly called “Keynesian economics” (named after a 20th-century economist named John Maynard Keynes). The theory is actually quite complex, and it was not all developed by Keynes, but let’s simplify the issue.

In general, Keynesian economics suggests that a government should spend more than it brings in in taxes in bad times. This will stimulate the economy and reduce unemployment. Conversely, when times are good, the government should raise taxes, cut spending, and run a surplus in order to slow down the economy and prevent inflation. There is some merit to the theory, and it works in a general sort of way.

Something similar works for individuals. Remember that year when you lost your job? You borrowed money to pay your bills until you could get a new job. Then, when you were working again, you began to pay off the debt or even put some money into savings to help you out on the next “rainy day” when you would have some unexpected extra expenses or some reduction in your income.

It works in theory, for individuals and for governments. Except that too many governments (and, it must be said, too many individuals) never get around to the second half of the theory. They never get around to paying off their debt or saving for the future.

What Justin Trudeau’s Liberal government has done over the past four years is particularly irresponsible. It has run massive deficits (of close to $20 billion a year) at a time when the economy was doing very well and unemployment was very low. It might be remembered that the Stephen Harper government ran big deficits to counter the effects of the 2008 worldwide recession, and it worked very well for the Canadian economy. But once the recession was over, the Harper government began moving toward running small surpluses to pay off the debt it had accumulated.

In contrast, there is absolutely no economic justification for the deficits the Trudeau government has been running.

It Could Get Worse

There is an even bigger danger to governments running unnecessary and irresponsible deficits. Essentially, it puts government finances in a precarious situation. It means that the government will not be able to respond appropriately when the next recession hits. If it is already running a large deficit, it will not be in a position to increase the deficit to counter the recession without facing very serious consequences. When a government’s debt becomes too great, lenders will refuse to lend any more money and/or will charge higher interest rates. At that point, the government will be forced to cut spending, reduce government grants and services, and increase taxes. This will deepen the recession and throw millions of people out of work. In essence, when a government (or an individual) gets too deeply onto debt, it goes bankrupt.

If that happens, it will very definitely affect you.

We may think it won’t or can’t happen here, but it can. It has happened recently in Greece and Spain and many other countries. Lending analysts have already begun expressing concern about the increasing levels of Canadian government debt and issuing warnings about possible interest rate increases.

So, does the Canadian government’s budget deficit matter to you? Absolutely, it does.

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Reflections on Max 8: Sophisticated Airplanes and Self-Driving Cars

Would you feel safer flying in a Boeing 737 Max 8—or in the 40-year-old formerly mothballed plane pulled out of retirement to replace it?

Have 40-year-old planes actually been pulled out of retirement and put into service? Probably not. But, since hundreds of Max 8s have been grounded, replacements have had to come from somewhere. Airlines don’t have hundreds of extra planes sitting around. It will take months or years to build new planes. The only alternatives have been to cancel flights, look for older, underused airplanes, and/or reduce routine maintenance in order to keep existing planes constantly flying.

Much of the reporting of the Max 8 issue has been shallow. The idea that air travel is safer now that the “dangerous” Max 8s are grounded ignores the alternatives. “Dangerous” is a relative term when dealing with complex machines and equally complex human beings.

Generally, air travel is very safe. When accidents happen, there are mass casualties, and that draws attention, but such accidents are actually very rare. Airplanes have far better technology than cars, and pilots are much better trained than automobile drivers. The standards are higher.    

The Discovery channel program Mayday provides a wealth of information about aviation issues. Each episode of this program recounts the investigation into a single plane crash. The investigations take months. It takes a long time to decode and analyze what is in the black boxes. There are actually two of these boxes (painted orange)—a cockpit voice recorder and a data recorder that records speed, altitude, control settings, fuel consumption, and dozens of other pieces of information.

In addition, investigators examine the wreckage in minute detail, talk to witnesses, interview air traffic controllers, interview survivors, interview mechanics, review pilot histories, check training procedures and manuals, check maintenance histories and maintenance procedures, look at previous crashes, and even investigate human psychology in areas such as blind spots, distractions, and fatigue.

After months of painstaking investigation and analysis of an accident, the investigators write a report. What often emerges is that a crash had multiple causes. Airplanes have many safety and backup features designed to prevent accidents. If a mechanical problem occurs, pilots are trained to work around the problem and keep the plane flying. If a pilot makes an error, the co-pilot is there to offer a correction, often using a troubleshooting manual, and the plane itself will sound a warning or even override the pilot’s error. Therefore, when there is a plane crash, it is usually caused by a combination of human and mechanical failures. This happens for instance, when a pilot chooses the wrong response to a mechanical problem or when a pilot is confused because more than one thing went wrong at the same time. It is easy to blame pilots for such errors, but modern airplanes are very complex, and pilots often have only minutes or even seconds to diagnose and respond to problems. A complicating factor is that pilots have learned to depend on airplanes’ automated and safety/backup systems and can become complacent. In a crisis, it may take precious time for them to realize there is a problem, take responsibility, analyze the problem, and act.

The Max 8 Accidents

What seems to have happened in the Max 8 crashes in Indonesia and Ethiopia is that a sensor was out of position and gave incorrect data to the airplane’s computer, which triggered an automatic safety response; that is, the airplane computer received data that suggested the plane was about to stall, and so the computer pushed the nose of the plane down to prevent the stall. The pilot’s response should have been to disengage the safety system and fly the plane manually.

The Max 8 is a new plane with many new safety systems to prevent crashes, and that has raised a number of questions. There have been allegations that the pilots were not fully trained to understand these new systems and know how to handle this new technology. There have been suggestions that the training programs themselves were not fully developed and not readily available. Regardless of training, it is undoubtedly true that the pilots had not flown the planes enough to have become experienced in dealing with the new systems. There have also been allegations that there were bugs in the plane’s computer systems and/or design flaws that had not shown up in the testing of the new plane model and that may only have become evident in a few of the many varied situations that airplanes actually fly in. Since both Max 8 crashes occurred in the Third World, there have also been suggestions that that these pilots were less well trained on the new plane than North American pilots, perhaps because of language issues, but that might not be the case either.

As far as I know, while preliminary conclusions have been reached pointing to design faults and inadequate training, the final reports have not yet been written on the two crashes, and so the full answers are not yet fully known.

Even if the same problem brought down both planes, solving the problem is obviously taking considerable time. Overhauling a complex set of operating guidance systems is not an easy process. Fixing one problem might create new ones. Retraining pilots on all of the many things that might go wrong is also a lengthy and complex procedure.    

It is disconcerting to ponder that a computer-controlled system designed to keep the airplane safe might actually have caused it to crash.

Implications for Automobiles

The recent Max 8 crashes and the resulting safety concerns also raise questions for automobile safety.  

Like piloting a modern aircraft, driving a modern automobile requires interaction between human beings and increasingly complex mechanical and computerized machinery. Modern automobiles have self-parking technology, lane departure warnings, automatic braking systems, innumerable sensors, and much more. These systems are designed to make automobiles safer, and in general they do, but they do not necessarily make driving simpler.

And such systems are only the beginning.

Automobile manufacturers are now designing autonomous or self-driving cars, assuring us that this will make us much safer. They tell us that since human error causes most automobile accidents, eliminating human control will eliminate accidents.

This leads to several thoughts.

1. Computerizing cars and adding safety warning, backup, and autonomous systems is reducing accidents in automobiles just as it has done in airplanes, and further innovations will no doubt reduce accidents even further.

2. While in the past most accidents were due to human error, in the future most accidents will be due to computer errors or failures in the interaction between human beings and the computer-controlled machine. The reason most accidents are currently due to human error is because most vehicles are currently controlled by humans. When most vehicles are controlled by computers, most accidents will be caused by mechanical failures and computer problems.

3. Computers are fragile. The life expectancy of a cell phone is two to three years. The life expectancy of a desktop computer is about five years. The lifetime expectancy of a computerized home appliance is five to ten years, about half the lifetime of the non-computerized older appliances. No matter how well the systems work when heavily computerized vehicles are new, how well will they work when they are five to ten years old?

4. Sensors are also fragile. The misalignment of a single sensor might have brought down the Max 8 planes. Like airplanes, autonomous vehicles will only be as reliable as the data they receive. In an automobile, the sensors must correctly measure the position of other vehicles, the edges of highways, and much more. And sensors on vehicles are more vulnerable. What happens if mud or slush or a rock gets splashed or thrown onto a sensor? What happens if a sensor fails?

5. Airplanes rely on radar and airport guidance systems. Automated vehicles must rely on GPS systems and external data, which are more complex and less dependable. There are far more cars on the road than there are airplanes in the sky, and GPS systems are not maintained with the same rigorous attention to detail. What happens if a dog or a rock or a snowbank or something else unexpectedly appears on the highway? What happens if there is a detour? What happens if someone has incorrectly entered the wrong coordinates or other data into a GPS system?

6. Computerized and autonomous vehicles are more expensive. I once had to get rid of a car because a sensor designed to measure evaporation in the gas tank failed and it would have cost too much to replace the sensor and the computer system that monitored it.

7. Will autonomous vehicles have the same level of testing and reliability as airplanes? Can we expect a $100,000 vehicle to be as safe as a $100 million airplane?

8. Airplanes undergo rigorous maintenance and inspection regimes. Pilots are required to inspect and check all systems before takeoff. Can we expect drivers of autonomous vehicles to be as diligent?  

9. There is more congestion and far less reaction time in vehicles. The Max 8 pilots had minutes or seconds to correct their problem. Now imagine if they were flying in close formation with a thousand other planes. That is the situation on most highways.

10. In spite of their automation and sophistication, modern airplanes require the presence of two (and sometimes three) trained pilots. Can automobiles be expected to be so safe that they do not require a human backup system?

11. Pilots learn to depend on the automated and computerized safety systems in airplanes and can become complacent. In a crisis, it often takes precious time for them to realize there is a problem, take responsibility, and act. Drivers of computerized and autonomous automobiles will be tempted to also become complacent. Will a human being who becomes conditioned to just being along for the ride be able to react in time when a problem arises?

12. One of the factors in the Max 8 crashes seems to have been that the pilots were not fully trained on how to monitor and troubleshoot the problems in their highly sophisticated aircraft. As automobiles become ever complex, they will require far more and better driver training, not less.

13. When an airplane crashes, investigators spend months investigating every facet of the crash and determining ways to make airplanes safer so that similar accidents do not happen again. No matter how complex vehicles become, there is no way that experts can devote the same level of investigation into vehicle crashes. It is probably unrealistic to expect vehicle travel to ever be as safe as air travel.

14. Technology has generally made us safer. Computerized and automated systems on automobiles will make them safer and reduce accidents. But complex machines can break down just as easily as complex human beings. As much as we want to believe it, there is no person or machine or computer than can guarantee safety and eliminate all risk.

A version of this article was published in the summer 2019 issue of Collision Quarterly

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The Hypocrisy of the Entertainment Industry

Item: Netflix has decided to “ban smoking from all original content rated TV-14 or PG-13 and below.”

The media giant known for its risqué content will continue to present shows filled with violence, crime, sexual promiscuity, drug addiction, excessive consumption of alcohol, murder, theft, fraud, dishonesty, and occult practices. But it is good to see that Netflix wants to do the right thing and its shows won’t encourage young people to smoke.

Item: Some theatres have cancelled showings of the movie Unplanned, although it will still be screened by more than 24 theatres in Canada starting this weekend.

The showing of this movie has attracted considerable attention in the media, almost all of it negative. In this coverage, this movie has almost universally been labelled “controversial.” It is hard to remember any other movie that the media have called “controversial.” “Controversial” is a buzz word used by the media as a covert way of saying, “We don’t agree with it.”

The Canadian news media have generally shown their bias not only by referring to the movie as “controversial” but also by describing it as being “anti-abortion.” The media are careful to call other groups by their preferred labels, but the media insist on calling “pro-life” groups “anti-abortion” groups. The bias is evident in that they refer to groups such as Planned Parenthood as “pro-choice” groups rather than “pro-abortion” groups. Furthermore, the news coverage has not focused on the film itself nor the human story behind it, as would happen with other movies. Rather, the news coverage has been focused on the opposition to the movie and criticisms by groups such as Planned Parenthood.

When criticized for offering movies filled with sex and violence, for years movie makers and movie distributors have routinely said that they do not censor movies and are only giving people what they want. Yet they are often reluctant to show “Christian” movies and “controversial” movies such as Unplanned even though theatres are often “packed” when they do show such movies and empty when they show some of the more extremely violent and pornographic movies. In fact, the theatres often agree to show such movies only after an intense lobbying effort, such as occurred before they agreed to show Unplanned. And they certainly don’t waste much money advertising such movies as they do with other movies.

Many of the news reports have quoted a news release from the Abortion Rights Coalition of Canada (ARCC) calling Unplanned “a dangerous piece of anti-abortion propaganda.”

Of course, movies such as Brokeback Mountain and Milk would never be called “propaganda” for homosexuality. And Million Dollar Baby would not be called “propaganda” for assisted suicide. As with “controversial,” calling something “propaganda” just means “I personally don’t agree with it.”

The Abortion Rights Coalition of Canada “fears the movie could incite fanatics to commit acts of harassment or violence against clinics or doctors.” This is ironic considering that the Salmar Theatre in Salmon Arm, BC, cancelled its plans to show the movie after violent threats were made against theatre staff and their families. The Movie Mill in Lethbridge, Alberta, is showing the movie but has taken the precaution of hiring extra security. Which side is actually most violent?

Planned Parenthood also says that the movie contains “vicious falsehoods” and “has nothing to do with reality.” This is even though the movie is based on a true story, a memoir of Abby Johnson, a Planned Parenthood worker who became a convinced pro-life advocate. “Based on” is a common Hollywood claim for many movies whose veracity is very questionable but rarely questioned. There is clearly a double standard at work.

ARCC executive director Joyce Arthur also noted that the film’s attempt to challenge abortion rights is “a non-starter in Canada, where women and transgender people have a Charter right to abortion based on their rights to bodily autonomy and equality.” Speaking of falsehoods, this is not technically true. When it struck down Canada’s last abortion law, the Supreme Court of Canada encouraged the government to enact an amended law; as far as I know, it has never declared that there is an unfettered “right” to abortion.

To their credit, the theatre chains Cineplex and Landmark have agreed to show Unplanned and to resist the calls to ban it—although only for a single week in a very few theatres. Furthermore, agreeing to show a movie is not the same thing as ardently promoting a movie, as they might do for “controversial” movies on the other side of the morality spectrum.

Unplanned reveals as much about the hypocrisy of the entertainment industry and the bias of mainstream news media as it does about abortion.

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Upset about the NHL Playoffs?

Sports fans are talking about the upsets in the first round of the Stanley Cup playoffs.

Upsets? Well, maybe. And maybe not.

The reality is that there is tremendous balance between National Hockey League teams.

This is largely because of the salary cap, which limits the amount of money teams can pay their players. This means that a team can only afford to pay two or three stars and the good players are spread fairly evenly among the 31 teams.

Each team plays 82 games in the regular season, and since a win is worth 2 points, teams can finish with anywhere from 0 to 164 points. But no team comes close to those extremes, and most of the teams are bunched together in the middle of the spectrum.

Okay, there was one series (and maybe one other) that could be legitimately called an upset in the first round of the NHL playoffs. In the Eastern Conference, Columbus Blue Jackets beat the Tampa Bay Lightning even though Tampa Bay was 30 points better than Columbus in the regular season. But Tampa Bay is the exception. The Lightning were by far the best team in the regular season, finishing 21 points ahead of the next best team.

The other series that might be called an upset was in the Western Conference, where the 8th place Colorado Avalanche (with 90 points in the regular season) beat the first place Calgary Flames (with 107 points) despite the 17-point gap between them in the regular season.

All of the other playoff teams were bunched very closely together. In the Eastern Conference, there were only 9 points between the 2nd place team and the 8th place team. In the Western Conference, there were only 11 points between the 2nd place team and the 8th place team.

Consider the other first round playoff matchups.

In the Eastern Conference, there were:

· 5 points between the Washington Capitals (100 points) and Carolina Hurricanes (93 points)

· 3 points between the New York Islanders (103 points) and Pittsburgh Penguins (100 points)

· 7 points between the Boston Bruins (107 points) and Toronto Maple Leafs (100 points).

In the Western Conference, there were:

· 7 points between the Nashville Predators (100 points) and Dallas Stars (93 points)

· No points between the Winnipeg Jets and St. Louis Blues (each had 99 points)

· 8 points between the San Jose Sharks (101 points) and Vegas Golden Knights (93 points).

Consider that since teams can earn up to 164 points, these margins are relatively small. Even Tampa Bay was only about 18% (30/164) better than Columbus in the regular season, and Calgary was only about 10% better than Colorado. The difference between the teams in every other first round playoff matchup was less than 5%. Such small margins are statistically insignificant and can be accounted for by injuries and luck. In the playoffs, the balance can be tipped by further injuries, luck, confidence, lack of confidence, interpersonal conflicts on a team, and late season trades made at the trade deadline just weeks before the playoffs. (It is arguable that Columbus closed the gap on Tampa Bay by adding stars Matt Duchene and Ryan Dzingel and several other players through trades late in the season.)

Furthermore, of the non-playoff teams, four were within 8 points of making the playoffs and five more were within 16 points. That means that those nine teams (of the fifteen non-playoff teams) have to improve by only 5% to 10% to make the playoffs. And even that is misleading since teams that are not going to make the playoffs fall farther back because near the end of the season they get discouraged, trade veteran players for draft choices, rest good players, send players for off-season surgery early, and try out rookies. Many of them are closer to the playoffs than it seems.

Take the case of the Vancouver Canucks, a team which missed the playoffs by 9 points. Forty-two of the Canucks’ 82 games were decided by one goal, including 25 losses. The team would have had to turn only about 5 of those losses into wins to make the playoffs.

Consider the element of luck. The outcome of a game can depend on as little as an inch in only one or two plays. During any game, it is not unusual for one or more players to hit the goalpost when they are shooting at the net. A puck may hit the post and bounce away from the net. If the trajectory of the puck is another inch to the side, it will hit the post and deflect into the net. A couple of inches can also make the difference in many other plays—such as passes, offsides, deflections, and saves.

Looking at the issue in another way, we see that each team dresses 20 players per game. If one of those players has an argument with his wife, stubs his toe, or catches the flu, it can mean the difference between his team winning and losing.

The bottom line is that not even experts can predict the outcome of hockey games, and anyone who bets on hockey games is a fool.

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Why Is It So Hard to Give a Clear Answer?

University professors are like gods. Not in the sense of being wise and all-knowing. Nor in the sense of being good and benevolent. They are godlike in the sense of being powerful beings. Especially when it comes to graduate students.

The success of undergraduate students, those enrolled in a bachelor’s degree program, is determined by a myriad of tests, exams, assignments, essays, and research projects. Undergraduates are part of a mass of largely anonymous students, they have many professors, and there are appeal mechanisms if they disagree with an assigned mark. But it is much different for graduate students, those who have already graduated with a bachelor’s degree and are hoping to earn a master’s degree or a doctorate. Graduate students frequently work one-on-one with only two or three professors and with only one professor in particular, their thesis advisor. This being the case, a student’s fate can be decided by the whim of a single professor.

As in all occupations, there are many professors who are fair and just, good and equitable. And there are some who are, well, tyrants.

This being the case, there are examples of tyrannical professors keeping a grad student hanging around for years—doing one more reading program, one more research assignment, one more research paper, etc.—with no intention of ever granting the student a degree.

Why would a professor do this? For two reasons, or maybe three. First, governments give much larger grants to universities for a graduate student than they do for an undergraduate student, and that money helps to pay the professor’s salary, with all its perks, and to keep the university solvent. Second, graduate students can be useful research assistants, doing most of the grunt work while the professor gets all the credit. They provide free or cheap labour. The third reason? Universities would never admit it, but some professors just seem to enjoy the power trip, holding another human being’s life and career in their hands.

When I was working on my doctorate, there was a young man who had been a graduate student in the department for seven or eight years and was still a long way from earning even a master’s degree. The assessment by the other students was that he was not so much a scholar or researcher as he was a social activist. He had been able to finance those wasted years because he was the son of wealthy parents (as many social activists are). University administrators finally took pity on him and expelled him from the program for not making more progress toward a degree.

And then there is the case of the patron saint of graduate students Theodore Landon Streleski. Streleski was a graduate student in mathematics at Stanford University who murdered his former faculty advisor, Professor Karel de Leeuw, with a ball-peen hammer on August 18, 1978. Shortly after the murder, Streleski turned himself in to the authorities, claiming he felt the murder was justifiable homicide because de Leeuw had withheld departmental awards from him, demeaned Streleski in front of his peers, and refused his requests for financial support. At his trial, Streleski said that the slaying was “a rational act” meant to dramatize his claim that Stanford mistreated its graduate students. Years later, when Streleski was released from prison, he refused to say he was sorry for what he had done, repeating that in his opinion the professor had deserved it. Streleski was likely mentally unstable, but he may have had a point. At the time of the murder, he had been pursuing his doctorate in the mathematics department for 19 years.

A Parallel Situation

This brings us to consider the actions of other unreasonably tyrannical authorities.

An obvious example is the case of Enbridge Inc., which spent about 10 years and over a third of a billion dollars trying to get approval for its Northern Gateway proposal to build a crude oil pipeline from Alberta to Prince Rupert, BC. That proposal was never turned down. It had passed through many stages of the approval process without ever being allowed to begin construction. The process dragged on for so many years that Enbridge just gave up in frustration.

Personally, from my very limited knowledge of the subject, that proposal seemed inferior to Kinder Morgan’s proposal to double its already existing Trans Mountain oil pipeline from Alberta to Metro Vancouver. That pipeline has also never been turned down. In fact, it has been approved at several stages. But it has never been built. Kindred Morgan also gave up, finally selling the pipeline to the federal government for $4.5 billion. Kinder Morgan’s shareholders rejoiced when Kinder Morgan executives found a lucrative way to escape from the legal and political quagmire they were in. Construction has still not begun on the twinning of the pipeline, and it remains to be seen whether the government will ever get the project built. While the government is scheduled to give final approval to the project in June, some group could easily launch another legal challenge and bring it to a grinding halt once again.

And the Liberal government is making the process even more difficult through its Bill C-69, which is wending its way through Parliament. Bill C-69 will create three additional hoops for companies who want to build projects such as pipelines to jump through. First, there must be an additional “consultation” phase with environmental and indigenous groups before the formal assessment and approval process can even begin. Second, the bill will allow anyone for any reason (not just those with “standing,” that is, those who will be directly affected by the project) to intervene in the approval process, which will greatly lengthen the proceedings. Third, the bill will force companies to satisfy objections based in science, but also objections based in traditional indigenous knowledge and objections based on sex and gender equality. A company will have to demonstrate that its pipeline will promote LGBTQ rights.

In graduate school, after I had been in the program for a year, I went to my senior advisor, the professor I worked under most closely, and asked, “You’ve seen my work for a year. Do you think I’m going to make it?” I was quite willing to keep working on the program, but if I wasn’t going to make it, I would rather have known then than waste several more years attempting something I was never going to achieve. My professor was surprised. It was a question rarely asked. He did not promise me that I would succeed. But he did tell me I was doing well and was not wasting my time. After a few more years of hard work, I was granted my PhD.

Like me, when facing regulatory agencies and governments, most companies would prefer to have straight answers. They would rather be told no than maybe. If they are told no, they can stop wasting time and go off and do something else.

I am not arguing that we should lower our environmental standards and allow companies to build whatever they want—anymore than I am arguing that academic standards should be lowered for graduate students. It is almost the opposite. We should have strong, well-defined environmental standards. We should also have strong, well-defined employment standards so that workers are treated fairly. We should also have strong standards protecting human rights.

But companies also deserve to be treated fairly. There should be very clear standards, and companies should be given clear and timely answers based on those standards.

It should also be said that governments are elected to make decisions. On difficult or controversial issues, too often governments are afraid to make a decision, afraid that someone will be upset. Instead, they put off the decision, dithering and postponing in the hope that they will find an easy way out. They offer vague answers and outright deception, promising everything to everyone and trying to keep everybody happy. In the end, they make no one happy. Not to decide is to decide. And too often this means that the answer ends up being no even when the government had no real intention of saying no, and nothing gets done.

I am aware that major, complex projects need considerable study and research before a decision can be made on their impact and whether they should be approved. I am also aware that there are differing opinions on what standards should exist and that political processes can be slow and cumbersome. But no process should take ten years and a third of a billion dollars. It is unreasonable to expect a company to invest that amount of time and money and still not be given an answer. In future, what company would ever invest that kind of money in any Canadian project?

Instead, like tyrannical professors, our governments demand that companies undertake one more study, engage in one more consultation, meet one more court challenge, meet with one more regulatory body—with no prospect of ever being given an answer. And all the time, these companies are spending more time and money for nothing. If governments don’t want development, they should simply announce that and save everybody a lot of wasted time and effort.

This issue is not a problem just for oil pipeline companies but for almost all potential investors in Canada. And it is not just an issue at the federal government level. Provincial governments can be just as unreasonable. At the municipal government level, developers do not complain so much about the requirements to meet environmental and community standards as they do about red tape, bureaucratic delays, and political indecision.

Time is money. Justice delayed is justice denied. It is not fair for governments to string companies along for years when they want to avoid making hard decisions or when they have no intention of ever approving the proposed projects. This is no more fair than university professors stringing along graduate students for years with no intention of ever granting them a degree. It is much kinder and fairer to say no, they don’t measure up, than to keep them jumping through hoop after hoop. Why is it so hard to say no—or even yes?

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Black Holes and Other Investments

Let me ask you a question. As an investor, would you invest in BlackBerry Limited?

This is a company whose sales dropped from almost $20 billion a year in 2011 to less than 1 billion in 2018. This is a company that racked up losses of over $10 billion between 2013 and 2017. Its work force has dropped from about 20,000 employees to about 4,000 employees. Share prices have dropped from a high of $140 a share in 2008 to less than $12 a share today.

So, would you invest in this company?

I have news for you. You already have.

Lost in the furor over the SNC-Lavalin affair is the fact that on February 15, Justin Trudeau announced that the federal government is investing $40 million in BlackBerry to help it develop software to operate self-driving cars. With its cell phone business in tatters, the company is trying to reinvent itself as a software developer.

The announcement also included the reassuring news that BlackBerry would spend $310.5 million “of its own money” to create 800 new jobs and maintain an additional 300 positions over the next 10 years. It also promised to provide 1,000 co-op job placements for students from 10 unspecified Canadian post-secondary schools. The announcement did not specify where the new jobs and placements would be.

Presumably, BlackBerry needed the money because its current reputation makes it difficult to raise money on the open market. As I said, would you invest in BlackBerry?

To be clear, this $40 million is not actually an investment. It is also not a loan. It is a gift. If BlackBerry’s current project succeeds, no matter how well it does, the government will not get any of its money back. For our $40 “investment,” we taxpayers will not get to share in any of the company’s profits. The government will collect corporate tax on the company’s profits (if any), and income tax on the employees’ incomes, but that is tax money the government would have gotten anyway.

While it is helpful for governments to create conditions where a market economy can flourish, it is almost never a good idea for a government to subsidize a specific company.

The market economy is based on competition, designed to reward competence and punish incompetence. Government subsidies do the opposite. Good companies don’t need the help. And subsidies and bailouts don’t usually save badly run companies anyway. An infusion of cash does nothing to correct the organizational, structural, productivity, product quality, and market deficiencies that are the reason these companies are struggling in the first place. One subsidy or bailout is usually followed by further subsidies and bailouts. Such companies often become dependent on them, and when the subsidies end, the companies often collapse altogether.

Not only do they fail to save struggling companies, but subsidies and bailouts can also have negative effects on other companies. Let’s consider why that is.

Contrary to popular belief, governments do not give away their own money. A government does not have any money of its own. It only has money it raises through taxation. So who does it tax? Not badly run or struggling companies, the ones it gives money to. They don’t have any profits to tax. The government gets its money from taxing the profits of successful and profitable companies. In essence, the government takes money from successful companies and gives it to failing companies. It punishes success and rewards failure. This is folly. It undermines the market economy the government wants to help. It puts formerly successful companies at a disadvantage as they struggle to compete against their subsidized counterparts, and it increases their tax burden. In this way, subsidies turn profitable companies into unprofitable companies and successful companies into unsuccessful companies.

It is always possible that a government subsidy can help a struggling company navigate its way through an unexpected difficult set of circumstances, that the subsidy can provide breathing space while the company reorganizes and renews itself. But it rarely happens.

There is some evidence that BlackBerry might be successful in its attempt to reinvent itself—it  made a small profit in 2018—but it is probably too early to tell.

So, Canadians, take pride in your new investment. But don’t count on it to take care of you in your retirement.