August 2010 Archives

As times get tougher in Bermuda, and employees compete for jobs and firms compete for an ever dwindling work, the law of unintended consequences is starting to get amplified.

For example, we're currently seeing a debate about work conditions, pay, and hours in the construction industry for Bermudians versus foreign workers.

The argument has thus far centred on the obvious - immigrant labour anywhere will work for less and work much longer hours than the local population - that's almost a given. Work permit holders are here to work, and they're explicitly told by the Minister not to expect any permanency, and that they aren't welcome for long, so they cram in as much work as they can do. Make hay while the sun is shining.

Bermudians with their families and other commitments here want more normalized working hours.

The construction industry flare up was pretty much inevitable. Employers need to bid competitively and cutting labour costs is the best way to get your number down without reducing your profit margin.

But here's an issue which doesn't get discussed, and what I think is an unintended impact of work permits:

Foreign workers are not just more attractive at times due to willingness to work longer for less, they are also less mobile. The employer has a level of control over their foreign employee as they're only allowed two jobs in 5 years and must seek a release from the current employer to seek new work.

So some employers I suspect see a work permit as an asset; their employee cannot jump ship for a new employer, and they may, just may, lean towards non-Bermudians for that reason.

Here's another.

A company has two employees who are indistinguishable in skills, performance etc.. They're both valuable but one is Bermudian, one is not. The employer doesn't want to lose either but knows that one is reaching the end of his 6 year limit.

So what happens? They begin to inflate (either artificially or for real) the position, title and responsibilities of the non-Bermudian in order to get him that key employee status so he can stick around.

And the Bermudian loses out as some non-Bermudians benefit from what I call key-employee title inflation.

Bermuda's immigration policy is broken. It lacks realism and is a serious impediment to Bermuda's future growth and prosperity.

It's time for it to be completely revisited, absent the inferiority complex, xenophobia and elitism that is embedded in it. Bermuda's immigration policy is contributing to many of these problems not preventing or fixing them.

At the end of the day it is quite simple. If a Bermudian is available to do the job then they should get the position. If not then it doesn't matter who the expat is and whether they've been here for more than 6 years or not. Churning expats is idioitic, expensive and pointless - other than political window dressing.

If a non-Bermudian has been filling a job for over a decade and been a good, productive, upstanding citizen - a net contributor to Bermuda - why shouldn't they have an expectation of long-term residency, or - gasp - citizenship?

I know, I know. I just touched the sacred cow of Bermuda politics.

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I really like John Swan's new building. I just hate where he built it.

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From the Ministry of Bizarre Press Releases today we get this:

In response to media inquiries, the Cabinet Office today confirmed that Head of the Civil Service, Mr. Kenneth Dill reaches retirement age in September 2010. Public Officers appointed under section 82 of the Bermuda Constitution reach retirement age at sixty-five years.

Premier Dr Ewart Brown indicated today that despite numerous attempts to contact the outgoing Head of the Civil Service, the matter had not been discussed with Mr. Dill.

"I have spoken with the Governor today concerning an interim arrangement for the period between Mr. Dill's departure and the swearing-in of a new Premier in October," the Premier said.

The Premier can't get hold of the Head of the Civil Service? Or the Head of the Civil Service won't return his calls? Really. That's shocking.

And the outgoing Premier has issued a press release telling Mr. Dill to not let the door hit him in the ass as he's run out of the office on his birthday because he's 65?"

How bizarre is this? Way to go on succession planning.

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I'm just restarting the engines after a couple of weeks of vacation, but in the meantime I'd suggest reading the Chamber of Commerce's August newsletter which addresses the impact of the massive and rapid build-up in debt, mostly to cover current expenditures in the past several years.

Traditionally, the Government has borrowed to partly fund capital projects (the balance of the cost was provided from the surplus on current account) and in periods where the costs were small, the borrowings were repaid. Thus throughout the period from 1970 - 1990 the borrowings were repaid usually within 10 years.

The last time that Bermuda had zero public debt was in 1991. From 1991 to 2004 it grew to $160m; from 2004 to 2008 it increased to $345m and now it is projected to be $900m by next March. This recent build up has not been created by capital spending alone but because the total expenditure on current operations has exceeded revenues. Thus all debt service costs and capital expenditure have been borrowed in recent times.

This is akin to not paying the minimum amount on a credit card statement and then continuing to rack up new purchases.

This situation will not be solved by an incremental rise in Government revenues as the economy recovers because all of these increased borrowings create their own demands for debt servicing. To continue the analogy above, a bonus or other extra income will not solve the credit card problem if you continue to live beyond your means; it requires a change in behaviour.

Economists term this situation a "structural deficit" because the root causes are not found in the level of economic activity but in the imbalances between revenues and expenditures.

I get a real sense that we're going to see a return of realism to Bermuda politics after the last 4 or 5 years of hyper-politicisation and vanity tenure of the outgoing Premier.

The PLP, both in candidates for Dr. Brown's seat and the front-running Paula Cox for Premier continue to exhibit little in the way of introspection or a changing of the guard. It's business as usual, the same old faces and the establishment digging in for another round.

On the periphery you have Terry Lister and Dale Butler who both seem like longer shots but are making noises that run so counter to mandatory PLP dogma that it's hard to see where it gets them. Both appear to be running campaigns aimed at a national audience and hoping the PLP decides to acknowledge the prevailing national mood of unease and concern for our social and economic future.

At best I suspect it may result in a moderation of the PLP who have become very radical during their Brown years, led by manufactured controversies and confrontation and wildly disingenuous distractions.

That doesn't bode well for Bermuda in the short term, but I do suspect that what we'll see is an increase in involvement from the many young, realist, professional types. They've sat on the sidelines for years in disgust but are coming to the realisation that we're running out of time and it's their future that is being thrown away.

The next generation must step up and start undoing the damage of the past decade. Tragically, after a decade of rapid economic expansion and budget surpluses due to a well positioned economy that the PLP inherited (and some good fortune in two major catastrophic events), Bermuda finds itself in a huge debt position with escalating violent crime, unemployment and declining investment.

It really is a lost decade.

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Vacation over. Think I have sugar poisoning.

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Digicel and the Dunleavy's are so done come Monday.

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Things will be quiet here for the next couple of weeks.

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Why is it that when I read about the White House party crasher fabricating a supposed assault by Whoopi Goldberg on the View, which the video incontrovertibly proves was a lie, I thought of Zane DeSilva?

Could it be because he fabricated a mob surrounding and banging on his car during the Corporation of Hamilton march?

Ah, the power of false media narratives and publicity hounds (the Salahis are the epitome of media whores - but I'm not allowed to say that. The term is racist you see. Except I just used it for a white couple. Go figure.)

I digress.

Even when something is patently untrue the press tend to immediately report the accusations as though credible - lending them credibility - rather than investigating the claim and then simply reporting that one side fabricated an incident out of thin air and proceeding to debunk it.

The story shouldn't be "Whoopi accused of attacking guest", it should be "Guest lies about assault on The View". As the Corporation of Hamilton story headline should have been "Minister fabricates story about mob attack on his car" rather than "DeSilva says angry protestors were driven by racism".

Just cuz it's in a press release doesn't mean it deserves reporting on or regurgitating.

The greatest example of the Republican/PLP strategy to level claims of rampant media bias, cowing the media into drawing false equivalencies and reporting from the back foot rather than the front, was watching the Republicans attack the New York Times for a liberal bias, all the while using them to carry their water on the bogus Iraq has weapons of mass destruction story.

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Haven't read Eat, Pray, Love, but Bali truly is a special place. And if you're there jump over to Lombok. Hoping to return soon.

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On the day that the Finance Minister launches her bid for the party leadership and Premiership, there's two big time takedowns of her tenure and a very clear letter to the editor several days ago about the poor terms of the recently placed 500M bond.

Michael Fahy of the BDA is on point laying out the situation international business finds itself in, and also has been put in because of the policies of the PLP (tourism too by the way).

Peter Everson of the Chamber of Commerce delivers a devastating rebuttal to the big lie that Bermuda's debt explosion was an outcome of external economics not Government policy.

Obviously I don't have a horse in the PLP leadership race, but I do have a dog in the fight for the future growth, prosperity and stability of Bermuda. It seems self-evident to me that what Bermuda needs is a change in Government and governance, not just a shuffling of seats among the PLP.

Paula Cox's roll out seemed to be punctuated with 'more of the same' and 'status quo'. The imagery of her being literally backed by the current establishment was undeniable. The strategy appears to be to win based on natural progression and inevitability (didn't work for Hilary Clinton but I don't see either Mr. Lister or Mr. Butler being able to muster much of a challenge).

With respects to Mr. Lister, I must say that I can't really reconcile his launch with his time in Cabinet. It's been in my head all week since it was such a polite repudiation of everything his party has stood for.

This Gazette editorial does a good job of laying out the challenges and issues he faces, but despite his distancing himself from Dr. Brown over the past 12 months or so, he was a big advocate of term limits - calling then UBP leader Grant Gibbons's election denouncement of it "a wolf in sheep's clothing" - and spent substantial time in Cabinet implementing the policies which have led us here. So he does have a fair amount of culpability for the PLP's legacy of division and financial mismanagement, notwithstanding his come to Jesus moment which is what his speech can only be characterised as.

It was a good speech, a great speech actually. It just felt like he was running for leader of the UBP which doesn't compute (or seem smart for a pitch to PLP delegates). That was a textbook UBP election campaign speech. Dale Butler as well has sounded the same UBP-ish notes.

So I struggle with what he says based on what we know, and the devil is in the details around tax reviews etc., although I live in hope that what he says should happen and will happen. Perhaps his intent is to at least drag the PLP back to moderation and away from the extremism that they've inhabited in the Brown years.

Mr. Butler, a colourful if hyper-active character who does well as a good parochially driven party maverick, really doesn't strike me as Premiership material. He hasn't waded in particularly strongly yet, but we'll see what he does over the coming months.

It still seems to me that this is Paula Cox's to lose, with the party hierarchy and establishment lining up behind her - which is an endorsement of her fiscal mismanagement. But she does have an ability to get cross over support, despite her speeches which are vacuous and littered with platitudes and cliches.

What I was left with from Paula Cox's launch today is that the PLP's Parliamentary group and party membership are collectively just wrong on the issues and tone and intend on continuing on with business as usual which Bermuda just can't afford.

Leadership matters of course and can chart a new course and set a tone. I suspect all 3 campaigns will implicitly if not explicitly acknowledge that Dr. Brown has got the party too far out on the extremes of conflict and racialism.

The past 4 years have demonstrated that Premiers matter even in our non-Presidential system - as hard as Dr. Brown tried to turn it into one. But at their core I don't see the PLP as a group really yet grasping and acknowledging the fundamental character, complexity and needs of our economy. There was no recognition by Ms. Cox of reining in the spending and acknowledge that in life there is nuance and complexity.

The PLP is still very much driven by dogma and caricatures of segments of the community and outdated stereotypes and politics. At least that's how it appears from the outside looking in.

The Bermuda of 2010 should not be about sound bites and cheap button pushing about oligarchs, race and democracy, as they managed to boil the Corporation issue down to.

Reality is not so simple. The Corporations issue is not so simple. The reality for Bermuda right now is that we can't afford - financially or socially - a continuation of the policies which have have so quickly undermined one of the world's most vibrant economies from a position of sustained surpluses into exploding debt and an exodus of talent and brains - both Bermudian and non-Bermudian.

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Ants. Everywhere. They've circled the house and are amassing forces.

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The Cup Match slip and slide was both an amusing diversion and ill-advised.

Marc Bean's comments in the Senate are rather narrowly targeted however.

If it's wrong to slide over a covered wicket after hours of delay and alcohol induced boredom, it's wrong for fans to run on the field and all over an uncovered wicket to mob the batter and celebrate a half century or century - not to mention the added impact of delaying the game.

He made no mention of that widely accepted behaviour.

Should those individuals receive lifetime bans as well?

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Anyone know when lobster licenses can be renewed? It must be about now.

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Mr. Burch has a problem with private sector employees using their corporate email addresses to sign political petitions:

"Forty six of them came from people who used their private e-mail addresses and were fine," he said. "Three of them came from persons who used their firm's e-mail. Where I come from, I think that's not normal.

"I wouldn't use the Government's e-mail system to send something personal. I think it was wrong."


"I'm not questioning anyone's right to their opinion," he said. "I just felt and I feel that if you use your employer's e-mail for anything personal, you have got to be wrong."

I have a question then.

How does he explain away using an explicitly apolitical civil servant from the Department of Immigration to pursue someone's employer over their political views - an act of political intimidation?

Private sector employees or employers have no obligation to remain apolitical, civil servants absolutely do.

If I were the recipients of these letters from a civil servant I'd be making a complaint to the Head of the Civil Service and the Ombudsman.

And one last point: this is the same Minister who sent out emails to people's corporate email addresses soliciting their political views on term limits.

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I now know how to dissemble and reassemble a @kitchenaidusa Artisan mixer. But it still won't turn on.

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