A Bit More Detail

Daren Foster’s Torontoist post is properly skeptical of the good sense of building a casino inside the city of Toronto, and of Rob Ford’s judgment in this regard. (Both his brother Doug Ford and the brothers’ political ally on council, Giorgio Mammoliti, are in support. So far, they seem relatively isolated. I think, and hope.)

To give the mayor his due: during Monday’s debate on the prospect of building a casino in Toronto, he executed what would not be considered a typical Ford manoeuvre. Instead of just blustering through, acting impulsively on gut instinct or what he believes some mythical taxpayer wants, Ford introduced a motion calling for further study and fact-finding before asking his colleagues to make a decision about whether to give a thumbs-up to the OLG and allow a casino in Toronto.

What’s that you say? A reasoned debate? A little of the old rational discourse? Well, I do declare.

Of course, the mayor made it clear what he personally thinks about casinos. For him, they are all upside. A hundred million delicious, lilac-smelling dollars would flow into our coffers—a number that, like many of the mayor’s boasts, is of uncertain origins. (Perhaps he simply multiplies 100 by 5 cents and arrives at the amount he needs to back a claim?) It’s never the same number, but it always works in the mayor’s favour. Call it the new math.

[. . . W]hat’s giving the mayor pause on the casino issue isn’t a new-found desire for informed debate, but rather the thorny matter of its location. Jane Holmes, Woodbine Entertainment Group’s vice president of corporate affairs, told the committee that a new casino anywhere else in Toronto would jeopardize Woodbine’s existing business—and by extension, the mayor’s much ballyhooed Woodbine Live complex. For Ford, the decision of where a casino might go clearly comes with much larger implications. How could he be seen championing a waterfront casino to the detriment of a business in his own backyard? Don’t us downtowners already get everything without leaving even so much as crumbs for the suburbs? The optics of that—not only for the mayor but for every pro-casino suburban councillor—are ugly.

It’s unfortunate that’s the direction it seems the casino debate will take: not if, but where. Because there’s a much larger conversation we need to have, one that bubbled up at Monday’s meeting: What is the net benefit of building a casino in Toronto?

Note the word net. Anybody who’s pro-casino can read off the reasons having one would be good by rote. Jobs, jobs, jobs. Added revenue to plug budget holes or build much-needed infrastructure. The zazz of a shiny new edifice dedicated to the pleasure of vice and a palace to watch Howie Mandel perform. Why would anybody be against that?

Besides, if we don’t build a casino, Mississauga will. And if Mississauga builds a casino then, well… Yes. What does happen to Toronto if Mississauga has a casino and we don’t? Do we get economic spin-offs, and do they mitigate massive traffic jams? That’s where the question of net benefits—gains minus the costs in receiving those benefits—enters in. The pros minus the cons. Just because the project comes with some advantages doesn’t mean we end up in positive territory.

It’s too soon to say what realistic revenue projections look like, but they won’t be nearly the amount Ford declared. It’s pretty well established that municipalities in Ontario with casinos get the short end of the stick, the slightest slices of financial pie. And the notion of our mayor marching into the premier’s office and striking a better casino deal for Toronto is delusional even by the hyper-delusional measure of this mayor. He’s missed no opportunity to alienate our current premier, regularly threatening him with electoral pain at the hands of Ford Nation. Not to mention that little bit of debt the province is wrestling with. Yeah, they’ll want to hand over more cash to us.

[. . .]

What downtown Toronto needs—especially along its waterfront—are more vibrant public spaces. Real, tangible, lived-in ones, not those manufactured by corporate entities catering to some projected desire we have to get away from it all. How much is it worth to us as a city to bargain away a chunk of our prime real estate in return for a whack of service jobs and an uncertain revenue stream that will invariably fall short of expectations?

This post at The Economist‘s Game Theory blog, wondering why the NHL continues to invest in failing Sunbelt teams despite economic and sporting rationales to the contrary, is worth reading.

Although this year marks an unusual low, Canada has been in decline since the 1990s, when teams were lured to America by the promise of bigger audiences and a more lucrative television market. To the dismay of Canadians, it has been almost 20 years since one of their teams won the Stanley Cup (the Montreal Canadiens in 1993). Yet hockey has failed to capture the public imagination in America in the same way as baseball, basketball and American football, or to attract the support it enjoys in Canada. With Canada’s economy now in better shape than America’s, a few teams may be considering a move in the other direction.

The Phoenix Coyotes are the most likely to uproot themselves. Although the Coyotes have advanced to the conference finals in the Stanley Cup playoffs, turning in their best performance since making Arizona their home in 1996, they have been struggling financially. After declaring bankruptcy in 2009, they were taken over by the NHL. This year, they are expected to report annual operating losses of about $30m, despite receiving $25m in aid from Glendale, the suburban Phoenix community that owns their rink. Quebecois hope the Coyotes’ recent travails will persuade them to relocate to Quebec City, where Quebecor, the province’s largest media company, says it will support the construction of a C$400m ($400m) arena. Since losing the Quebec Nordiques to Denver, Colorado in 1995, locals have been desperate to acquire a new NHL side.

Even so, Gary Bettman, the NHL commissioner, wants to keep the team in Phoenix and may finally have found a buyer pledging to do so for another ten years. Although the NHL has denied those rumours, its resistance to a move north of the border would not come as a surprise. For a start, Glendale might object to any deal that would let the Coyotes depart Phoenix and leave the community with an empty arena. The NHL may also be unwilling to sell the team at the price suggested by prospective buyers, having sunk a lot of money into the Coyotes since 2009. Ultimately, the NHL may still believe that Phoenix is potentially a more profitable market than smaller Canadian cities. Mr Bettman was also the main force behind the strategy to relocate to America in the first place. He may think a retreat is tantamount to an embarrassing admission of a mistake.

Nevertheless, the NHL’s continuing enthusiasm for the Sun Belt is hard to fathom. Even before the sub-prime mortgage mess demolished the economies of many southern cities, hockey had struggled to win over the region’s sports fans. Back in the 1990s, the Canadian dollar was worth just 72–73 American cents, and its value had fallen to 63–64 cents by 2001–2, making it impossible for Canadian teams to match salaries paid in American dollars. But the loonie is now worth the same as the greenback. Bringing teams back to Canada would strengthen the league and make economic sense.

The latest incarnation of the Winnipeg Jets already provides some encouragement. Having moved from Atlanta last summer, the Jets just missed this season’s playoffs. But they won 37 games over the course of the season, three more than their seasonal average over their last four years in Atlanta, and were much better defensively, conceding 246 goals compared to the Atlanta average of 270. Could the difference have been down to the level of support they received at the MTS Centre in Winnipeg, compared with attendance at Atlanta’s Philips Arena? Within minutes of tickets going on sale, the Jets had sold out for the season. Average attendance per game in Atlanta was just 73% of seating capacity (although this still meant 13,469 fans per game, compared with 15,004 for each sold-out game in Winnipeg).

I think that the NHL only has a limited amount of time. A January 2011 History and Futility post I made argued that, slowly, as a result of ffactors including the high cost of equipment, the emergence of other sports, and immigration from hockey-lacking countries, the sport of hockey is on a slow decline in Canada. There’s still a huge fan base–Quebec City is still trying to echo Winnipeg’s achievement in getting its NHL team back–but will it last indefinitely? I fear not.

The Deutsche Welle article’s simple title of “East Germany relied on forced labour” has the signal flaw of seeming to communicate conventional wisdom when, in fact, it’s communicating something come new to public attention: East Germany made use of forced labour to produce goods which could earn hard currency. It’s interesting to note that East Germany, arguably the most developed economy of Soviet-bloc Europe, eagerly entered into the sorts of trade relationships with Western countries–low-end manufactures and agricultural exports–which would be typical of more peripheral countries. Also, that East Germany took part in globalization to such an extent, images of autarky aside.

The allegations against furniture maker Ikea that East German laborers for years toiled for the Swedish group started the ball rolling. On May 2, the Swedish television network SVT broadcast a report that gave former prisoners in East Germany, formally the German Democratic Republic, a chance to speak. They said that up until the fall of the Berlin Wall in late 1989, Ikea furniture was made in East German jails, including by political prisoners. It was forced labor in East Germany for a Western company. This was not an isolated case, but a common practice from which many West German companies also benefited. All prisoners in East Germany were obliged to work.

“Prisoners were made to do the hardest and dirtiest work, the work that nobody else wanted to do, under the worst conditions,” said Steffen Alisch of Forschungsverbund SED-Staat, a research institute at the Free University of Berlin that investigates East Germany. He says threatening letters about forced labor were sent to Ikea as early as 1984.

[. . .]

What is known is that forced labor was a fixture of the business plan of the GDR. In the mid-1980s, it was estimated that there were around 20,000 in prison. The prisoners represented “only” one percent of industrial production, but the government “didn’t want to do without it,” said Hildigund Neubert, who is in charge of Stasi files in the state of Thuringia, in an interview with DW. “When amnesties were granted on the GDR’s national day, there were complaints from the ministries. They were afraid that without these workers, the economic plan could not be fulfilled.”

For their work, the prisoners were given only a pittance. But Neubert says the responsibilities of individual Western firms are difficult to determine. He thinks it would therefore be a welcome move if the companies that profited from the dirty business of the slave laborers compensated by making donations to foundations in restitution.

It was common knowledge that Western goods were produced in the GDR. But the people in both German states knew only part of the story. Western companies benefited from the low wages in the GDR, while the West German government had a political interest in trade relations in pursuit of its policy of “change through rapprochement.”

East Germany saw exports to the West as an opportunity to obtain the hard currency it increasingly needed. It had cooperation agreements with Sweden and Japan. “With [West] Germany, that would have been impossible,” said Maria Haendcke-Hoppe-Arndt, an economist and former employee of the Stasi documentation authorities. East Germany wanted to avoid any official connection with West Germany.

[. . .]

“But there were still arrangements as to who should provide what and how,” said journalist Anne Worst, who made “Eastern Products for the West,” a comprehensive television documentary for German public broadcaster MDR. “An important meeting place was the Leipzig Trade Fair. There were plenty of salespeople.”

Worst’s research shows that 6,000 West German companies did business with the GDR. Among them were companies such as catalog merchants Quelle and Neckermann, shoe maker Salamander and cosmetics firm Beiersdorf, but also less-well-known firms such as battery maker Varta and spirits maker Underberg. As long as the Soviet Union supplied the fraternal socialist country with cheap oil, East Germany’s exports of petroleum products were abundant, as were the exports of chemicals, machinery and textiles.

[. . .]

While textiles were the best-known export item from the GDR, they were by no means the most common, Worst said: “The GDR delivered an incredible number of foods to the West, whole sides of pork, fruit and vegetables, which were also partly in short supply in the GDR. When it came to fresh food, all of West Berlin was dependent on supplies from the GDR.”

I’ve a post up at Demography Matters taking a look at the latest developments on emigration from the former Soviet republic of Georgia, in the Caucasus.

Emigration is not diminishing with 23% of the population having emigrated, despite the difficulties faced by Georgians in travelling internationally and the relative insecurity of these migrants (the largest community is in an anti-Georgian Russia, while the largest Georgian immigrant community in the European Union is in Greece). Rather, emigration is a necessity.

Go, read.

Marginal Revolution’s Alex Tabarrok let me know that friendly if distant Canadian-Honduran relations have just become more intense: Canada is now exercising something like sovereignty over a community in Honduras, as economist Paul Romer and Honduras politician Octavio Sanchez wrote in The Globe and Mail.

Many people from around the world would like access to the security and opportunity that Canadian governance makes possible. According to Gallup, the number of adults worldwide who would move permanently to Canada if given the chance is about 45 million. Although Canada can’t accommodate everyone who’d like to move here, it can help to bring stronger governance to many new places that could accept millions of new residents. The RED in Honduras is the place to start.

[. . .]

Canadians are increasingly aware of the limits of traditional aid but remain committed to the principle that supporting international development is not only in Canada’s national interest but is the right thing to do. Recent trade agreements with Peru, Colombia, Panama and Honduras demonstrate that Latin America remains high on Canada’s development agenda.

The RED offers a new way to think about development assistance, one that, like trade, relies on mutually beneficial exchange rather than charity. It’s an effort to build on the success of existing special zones based around the export-processing maquila industry. These zones have expanded employment in areas such as garments and textiles, with substantial investment from Canadian firms such as Gildan, but they haven’t brought the improved legal protections needed to attract higher-skilled jobs. By setting up the rule of law, the RED can open up new opportunities for Canadian firms to expand manufacturing operations and invest in urban infrastructure.

By participating in RED governance, Canada can make the new city a more attractive place for would-be residents and investors. It can help immediately by appointing a representative to a commission that has the power to ensure that RED leadership remains transparent and accountable. It also can assist by training police officers.

The courts in the RED will be independent from those in the rest of Honduras. The Mauritian Supreme Court has agreed in principle to serve as a court of final appeal for the RED, but Canada can play a strong complementary role. Because the RED can appoint judges from foreign jurisdictions, Canadian justices could hear RED cases from Canada and help train local jurists.

Oversight, policing and jurisprudence are just a few of the ways in which Canada can help. Effective public involvement will also be required in education, health care, environmental management and tax administration. Such co-operation can be based on a fee-for-service arrangement in which the RED pays Canada using gains in the value of the land in the new reform zone.

Wikipedia’s Spanish-language Región especial de desarrollo, “special development region”, goes into more detail, translated into English below.

“Special development region” is the official name of an administrative division urban Honduras (colloquially called model city) subject to the national government and provided a high level of autonomy with a separate political and judicial system, and under an economic system theory based on free market capitalism. [The project involves the creation of several cities in these regions with the hope of attracting investment and creating jobs in those areas. Each region has its representative special executive or governor and will have its own laws (or constitutional status), people must voluntarily enter into this system. The Law of Special Development Regions articulates the relationship between the constitutional status of each region special and the sovereignty of Honduras.

These special areas are the application of so-called charter cities or towns have as a reference model and the experience of China’s special administrative regions (mainly the case of Hong Kong and how it served as a model city as special economic zones Shenzhen) and other countries of East Asia and Southeast Asia such as South Korea and Singapore.

The constitutional provisions that establish special development regions were raised in late 2010 and early 2011 during the government of President Porfirio Lobo, who gave official backing to economic development proposals of American economist Paul Romer who promotes the benefits of creating charter cities or towns in territories uninhabited model, with clear and stable rules (legal certainty) and open doors to capital and immigration.

I don’t know what to think of this. It’s the first time I’ve heard anything about Canada’s involvement in this concept anywhere. The Canadian government hasn’t replied, so far as I’ve heard, but this might be the sort of idea the Conservative government would go for.

People, what say you?

Over at The Power and the Money, Noel Maurer performs some pretty nice local history in three parts (1, 2, 3), using results from the 1940 census to see just who lived in his childhood neighbourhood of New York City’s East Harlem, and how.

414 East 115th Street then, like now, had five families in it. The first listed is the Squittieri clan. Dominick and Geneviene had been born in Italy in 1888 and 1890 respectively. Dominick ran a grocery store and worked a 60-hour week to earn $1300 per year — $20,800 in 2011 dollars. They rented for $35 a month, or $561 in 2011 dollars. Dominick was listed as having had two years of schooling; his wife had never been to school at all. They lived with their ten children: Carmine, 24; Alphonse, 23; James, 22; Helen, 20; Yolanda, 18; John, 17; Mary, 16; Domenick Jr., 15; Louise, 12; and Gilda, 10.

You can see the lingering effect of the Depression in the statistics. Carmine worked as a painter (a 48-hour work week) for $1190 a year — $19,100 in 2011 dollars. Alphonse was not in the labor force. It isn’t completely clear why: there is a squiggle that is probably an “H,” meaning he was doing “housework.” It could, however, be a “U,” which would indicate “unable,” meaning a disability. He was not a student. His sister, Helen, was also out of the labor force and clearly listed as doing “housework.”

James, Yolanda, and John were unemployed and looking for work. The enumerator put “new worker” as their profession. All three had been unemployed for over a year. Carmine, Alphonse, James, Helen and Yolanda had all dropped out of school in the eighth grade; John had finished one year of high school before dropping out. The four youngest children were all in school.

Of course, it was a different time. I do not know what happened to the Squittieri family, but I bet you they went on to economic success — something that a Mexican-American family with the same statistics today will probably not achieve. But I don’t know: in 2022, it might be possible to try to track them down in the 1950 census.

Amply illustrated, this genealogy of place is a must-read.

This post at Crasstalk makes the provocative argument that the continuing gap in pay between men and women in the United States (and almost developed countries, I’m willing to bet) doesn’t necessarily speak solely, or primarily, about the continuing issues of women in moving towards full equality. Things may be very bad for the majority of men, too.

Hanna Rosin’s controversial article for The Atlantic, “The End of Men,” struck a nerve in 2010. After all, if men are losing out to women, why are our corporate boardrooms and government institutions still dominated by men? Rosin’s answer is that the period of male dominance in management and leadership may be coming to an end. We’re on the cusp of changes that will topple the old Man Men paradigm.

Rosin’s argument centered around the fact that male-centric jobs (manufacturing, construction) are seriously threatening the role men have long held in the home and in communities, but she also combines an analysis of our economic recession with a sort of evolutionary argument about how males evolution hasn’t kept up with society at large.

Dr. Roy Baumeister, a psychology professor from Florida State University and author of “Is There Anything Good About Men?” has explored how male behaviors affect socities. In a speech to the American Psychological Assocation in 2007 he argued that the dominance of a few powerful men at the top of the food chain says nothing about the overall socio-economic wellness of men in our culture.

Thoughts?

• Dan Hirschman at A (Budding) Sociologist’s Commonplace Book distinguishes between the economic measurements GDP and GDP.
• James Bow mourns the death, via cutbacks and falling passengers, of Ontario’s Northlands railway.
• Centauri Dreams considers the question, inspired by evidence that Alpha Centauri is significantly older than Sol, and speculation that habitable planets are likely to be considerably older than Earth, of where the aliens are.
• Daniel Drezner is somewhat surprised that he is optimistic about the spread of liberal-democratic ideals worldwide, at least relative to others in a recent issue of The National Interest.
• Geocurrents’ Asya Pereltsvaig considers the similar Russian-based contact pidgins in Siberia and along Russia’s Arctic coast as the product not of contact with a single language area but rather as consequence of a mindset of how to talk to non-Russians.
• Marginal Revolution notes a New York Times article noting the culture shock experienced by trained professionals migrating to Germany from southern Europe.
• Registan notes that the International Labour Organization’s demand to inspect Uzbekistan’s cotton plantations to verify that forced and child labour is not used there, likely to be rejected because (among other things) Uzbekistan does use forced and child labour, is likely to lead to worsened relations with the United States.
• I’m late on this one, but Slap Upside the Head notes the retraction of the only credible study on ex-gays by the paper’s author.
• Towleroad notes the hysterical anger of Islamic clerics and the usual in Iran at the rumour–not the reality–of a gay pride parade in neighbouring Azerbaijan.

I blogged at the end of March about the apparent birth, in Chicago’s Fermilab, of the first generation of neutrino communications systems. I shared the speculation at the time that communications systems using neutrinos, those elementary particles which travel at the speed of light and hardly intersect matter at all, would be useful in communications with space probes and submarines, i.e. vehicles out of communication for long periods of time because conventional electromagnetic communications systems are blocked by massive quantities of matter. (Oceans, say, or planets.) Now, io9 notes that neutrino communications systems might be useful for stock trading.

Neutrinos may not travel faster than light, but that doesn’t mean they can’t be put to good use. By sending encoded pulses of neutrinos on a 10,000 km shortcut directly through the Earth, financial firms and high-frequency trading companies think they can get a 44-millisecond communication advantage over their competitors.

That might not sound like much of an edge, but in a world where hundreds of millions of dollars change virtual hands in just fractions of a second, even milliseconds become significant.

“Thirty milliseconds is a lot of time in high-velocity trading,” explains former J.P. Morgan Chase options trader Espen Gaarder Haug in an interview with Forbes Magazine.

According to Haug, cities with the greatest distance between them would stand to gain the biggest time boost. Communication between New York and Tokyo would see a 23.7 millisecond time advantage; communications between London and Sydney would see almost double that.

Of course, financial institutions still need the infrastructure to make this all happen, which would basically require a particle accelerator beneath any firm that wanted in on the latest, greatest trading trend. And while that’s not likely to happen anytime soon, something tells us that as soon as one of these firms takes the plunge on neutrino-communication, the rest of them are liable to follow suit.

The English-language version of Denmark’s Politiken carries the news of Greenlanders’ displeasure that a high-end Danish store is no longer going to stock goods that could trace their origins to Greenland’s seal hunt.

Might this have long-term repercussions re: the Danish-Greenlandic constitutional link? I wonder.

On Tuesday, Denmark’s upmarket Magasin store is to stop all sales of products made from furs from wild animals or from pelts that have not resulted from food production.

Magasin, which is owned by Debenhams of the United Kingdom, is one of the latest outlets to target fur sales, as a result of campaigns by animal rights activists to stop the global seal cull. Magasin’s decision is a particular thorn in the eye of Greenland Inuits, who are part of the Danish commonwealth.

In the light of Magasin’s decision, a group of Greenland Inuit hunters is to travel to Copenhagen in order to demonstrate at a happening on May 1 to highlight the problems for indigenous hunters caused by Europe-wide bans on sealskin sales.

“When you live in Greenland, you live from maritime resources. We have always done that, as that is what there is. Hunters in the outlying districts in particular find it difficult to feed their families when the sealskin trade drops, as they have no alternatives. Many of them have become dependent on social aid over the past couple of years,” says Leif Fountain, chairman of the Greenland Hunters’ Association, himself a fisherman and hunter for the past 27 years.

While Canadian hunters use clubs for about a third of their cull, Greenland Inuit use rifles, with wastage only occurring if an animal is only wounded and escapes before a hunter reaches it.

[. . .]

Sara Olsvig, a Greenland member of the Danish Parliament, says that the EU is mainly responsible for the sealskin crisis in Greenland by banning imports of seal products into the Union. Although the ban includes an exception for indigenous, sustainable hunts, the EU has not informed customs authorities, businesses and consumers that sealskin from Greenland is acceptable.

“This is not just an animal welfare issue, it is also about a people’s right to live off the resources we have and to maintain a basic part of our culture and identity,” says Olsvig.