Yearly Archives: 2008

The most important election lesson – networks

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So much has happened and, so little has changed. As Kinsella put it best before heading to the night, no one is happy. For me, I’m most saddened to see my friend Omar Alghabra lose, he’s smart, friendly, a great representative and an asset to Canadians – whether they voted for him or not. His loss is a loss for all of us.

So what lessons should the parties draw from last night – and in particularly the election’s biggest losers, the liberals?

Probably the most important lessons is both the strengths and limits of network effects in politics.

The Conservatives is by far one of the most networked parties for Canada’s political environment. Why is this? Because of their roots as the Reform party. Because they started from nothing – and were even feared by larger corporate funders who saw them as too radical – they developed and have come to rely on fund raising through individuals. This has two consequences. First, to fund raise successfully in this manner they must be keenly aware of what their network of individual donors think, so they are constantly in tune with their supporters listening to them and engaging them. Second, by relying on a network of grassroots contributors they have never relied on large corporate donors. Thus, when Chretien passed campaign finance reform and essentially eliminated institutional donations (from unions and corporations) he created an election fund raising ecosystem in which the conservative model was well positioned to thrive.

However, while their network enables Conservatives to raise money, it creates limits. Specifically, because the Conservatives are financially dependent on their core supporters they are constrained by how much they can moderate their message to expand their political support. The broader their appeal the harder it is to raise money from their base.

This is the Conservative dilemma. (It is also one shared by the Greens and the Bloc.)

In contrast the Liberals have almost the opposite problem. Over the past few decades liberals have become addicted to the easy money of a few wealthy individuals and large corporations. Rather then decentralized and networked, fund raising has been highly centralized – almost divorced from individuals. Unfortunately, the party has been slow to adapt since Chretien shut off this intravenous drip. Specifically, two interrelated  problems plague the party. 1) It is still wrestling to figuring out what infrastructure is needed to fund raise in this new individual donor-centric environment, and more problematically 2) to grasp that rethinking infrastructure alone is insufficient. Individual-centric fund raising will rethinking both the structure of the party and its relationship with individual members. Until the implications of individual-centric fund raising have been understood, fund raising – and thus effective campaigns – will remain a difficult endeavor.

But probably the party facing the biggest challenge – long term – is the NDP, the one party that can ignore networks and continue to survive. This is largely because the unions – which can no longer donate as much money as they once could – can still deliver boots on the ground to help out. In short the NDP is one party that need not cultivate a network in order to survive. This dependency means it will likely not put in place the infrastructure to enable organic growth. Consequently, growth will require an exogenous event, namely a Liberal collapse – something that while theoretically possible – is hard to imagine. As such, the NDP will continue to sit influence the debate indirectly, a role that satisfies some of its members while infuriating others.

Whatever you do today please, vote.

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No matter where you are, what your day looks like, or who you intend to vote for, I hope you’ll take the time today to vote.

If you’ve left it all to the last minute and your not sure where the polling booths in your riding are – check out this page on the Elections Canada website. You can search by postal code.

Makes it easy.

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Also, for those who care, did a little upgrading of the blog over the weekend. Some new stuff under the hood that you won’t notice but also some cool stuff for your browsing pleasure. Among those things that are visible:

  • New section on the sidebar tracks my most popular posts (obvious winner here – Firefox pledge map – pledges as a % of population was slashdotted and before my server crumpled into a crying lump of clay it logged over 20,000 hits in 24 hours)
  • After clicking on a specific post a new sidebar will feature lists three posts that may be of interest
  • For non-Canadian techies interested in my writing on open-source but not much else, there is now a special open source subject specific RSS feed

WordClouding Harper, Dion and neo-progressivism

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Just got back from the Banff Forum this weekend where I had a great time making new friends, meeting up with old friends and – with Taylor – doing a panel where we discussed our Canadian Literary Review (LRC)article on how the Left is killing progressive politics. The audience gave us lots of positive feedback and, more importantly, new insights which is always both encouraging and helpful.

On the same day I discovered – thanks to the National Post (hey, it was delivered free to my hotel room) – a great site called wordle.net which creates word clouds out of any text or web page you submit it. Very cool stuff. The National Post ran each of the party’s policy platforms through wordle which I thought was creative for a newspaper (hard to imagine the Globe doing something like that). Sadly, I wish I could link to the images, but they don’t seem to available online.

Turns out the Star (using Tagcrowd) has also been creating clouds out of the speeches Dion and Harper gave one day apart at the Empire and Canadian Clubs in Toronto. Notice how the words Stephan and Dion don’t appear in Harper’s cloud whereas Stephen and Harper are among the most used words by Dion? Interesting. Also of note? Dion seems to think “jobs” will resonate, whereas Harper seems to believe “taxes” will.

Anyway, to come back to the LRC piece, I was so inspired by these tags I decided I’d create one for the LRC piece. Tada:

Created using Wordle.net

The Crash: The beginning of the end…

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The response to the post on complexity theory and the financial crises has been very positive. Been recieving lots of positive feedback, thank you to any who have written or commented.

Several people, including Steven Johnson, the author of Emergence, posted a link to this great piece “The Economy Does not Compute” that I encourage everyone to read.

Dave D. emailed me with this fascinating story from the New York Times that arguably pinpoints the moment the incentives in the market were shifted that started us down the road to the present crises. Entitled Fannie Mae Eases Credit To Aid Mortgage Lending the piece is dated September 30th, 1999. This excerpt below really summarizes the underlying logic and benefits for initiating the change as well as predicts the ultimate catastrophe that it would unleash (remember, written in 1999):

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

The article shows us the challenges around blaming any one individual – except possibly Blll Clinton – as once the incentives for embracing a higher risk group were altered it vastly increased the chance that more and more people would cater to them and expose themselves to that risk.

The other fascinating thing about this piece is how the web is now getting to be old enough that it is becoming a fantastic tool for historians. Think of how much richer our history is going to be when critical documents like this one are both more accessible and easier to locate.

Presidential debates and conservative candidates

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Enjoyed watching the presidential candidate debates last night. I’m not sure anyone did exceptionally well (if anything both candidates seemed tired). McCain’s temper/contempt for Obama flared up at least once, but the only real good hit of the evening was scored by Obama (full transcript here):

McCain: You know, my hero is a guy named Teddy Roosevelt. Teddy Roosevelt used to say walk softly — talk softly, but carry a big stick. Sen. Obama likes to talk loudly.

In fact, he said he wants to announce that he’s going to attack Pakistan. Remarkable.

You know, if you are a country and you’re trying to gain the support of another country, then you want to do everything you can that they would act in a cooperative fashion.

When you announce that you’re going to launch an attack into another country, it’s pretty obvious that you have the effect that it had in Pakistan: It turns public opinion against us.

Obama: Look, I — I want to be very clear about what I said. Nobody called for the invasion of Pakistan. Sen. McCain continues to repeat this…

…Now, Sen. McCain suggests that somehow, you know, I’m green behind the ears and, you know, I’m just spouting off, and he’s somber and responsible.

Sen. McCain, this is the guy who sang, “Bomb, bomb, bomb Iran,” who called for the annihilation of North Korea. That I don’t think is an example of “speaking softly.”

Zing.

Back in Canada, we’ve had the debates but only at between the party leaders. Sadly try having a debate at the local level in Canada. Our conservative candidates are more protected than Sarah Palin. Last night at the Canada’s World debate not one of 14 conservative candidates in the lower mainland could make it. Indeed, across the country it would appear that conservative candidates have been told to not do all candidate meetings. It’s a sad state of affairs for our democracy when the party in power essentially hides its politicians.

Check out this website for a list all the incidents identified so far where Conservative candidates have declined an invitation to attend an all candidates meeting.

dinner with winners

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Friends in Vancouver – if you have any interest in attending the Vision Vancouver Fall Fundraiser please don’t be shy in dropping me a line.

I’m pretty excited about Vision’s new slate – which you can read about here – and our prospects in the upcoming election. These are exciting times for Vancouver – I get the sense that people want to see the city grow and mature in a way they haven’t before. That is certainly one of the reasons I moved back here and got involved in Vision.

If you want to start to see what it’s all about, come on out for the dinner…

Open Government comes to Canada

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I Believe in Open Badge

For those who are Canadian and who believe in open, I strongly encourage you to check out and register with Ibelieveinopen.ca modeled after its US counterpart Open Congress.

The goal of Ibelieveinopen.ca is to:

  1. Support reforms that increase government transparency and accountability.
  2. Make campaign promises specific and measurable, and report progress on promises and their metrics at least semi-annually.
  3. Publish the content of his or her daily schedule, including meetings with lobbyists and special interest groups.
  4. Support reforms allowing free access to scientific and survey data gathered by government institutions.
  5. Support reforms that make it easier for Canadians to obtain government information they have a right to know.

By registering, you can begin to let your preferred candidate and your MP know what you expect of them. Will this change things today, or tomorrow? No… but the goal is to begin developing awareness among politicians and the public about what we can and should expect from our representatives.

In the US Open Congress has encouraged its supporters to donate money to candidates that have signed on to its pledge but have asked that the donations ends in .09 cents (e.g. $50.09). By “tagging” donations in this way, candidates will know how much of much of the money they raise is tied to the fact that they have pledged to be open. It then becomes a way for them to understand its popularity and to prioritize the goal of being open. Very cool.

Will it work in Canada? Who knows. but it is definitely worth a try. No?

The Canadian and American Debates: Ice and Fire?

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Watching the debates – both the Canadian and US Veep contest – last night I was struck by how the debates both reflect each country’s political traditions and, in doing so ran counter to some old myths we have about Canadians and Americans.

In the US I thought that Biden easily trumped Palin – who managed to survive without too many big gaffs (although there were some very painful moments). In Canada, I thought May was the most interesting – aggressive, but grounded. Layton was good and Dion was not bad as well. Duceppe seemed relatively disengaged and Harper suffered both from the fact that he was able to rise above the fray and that he was getting attacked on all sides. Killer line of the night – delivered by Layton against Harper – came during an exchange of whether or not the Conservatives had a plan for the economy: “Where’s the platform, under the sweater?

More interesting than who won however, is what the debates say about the United States and Canada. Each of the debate formats seemed to play to the traditions of the office and political system of its participants. In Canada I feel this was a first – we finally got the format right. Rather than try to adopt the US presidential template, this year’s Canadian debate was downright parliamentarian in its style: raucous, aggressive, with lots of back and forth. Personally, I believe this was both more effective and engaging for the audience. Unlike presidents, who often try to stay above the fray, parliamentarians should be in the thick of it – and this debate format allowed these skills and that energy to come to the fore.

In contrast the US veep debate was very controlled, orderly and, well, patrician in comparison. As with the Presidential debate there was virtually no back and forth. Very little sparring and engagement between the principles. Indeed, the participants were almost passive aggressive – a little dig here or there – rather than engaging one another in battle. But then, this also reflects the traditional of the executive branch in the United States, which historically has often been patrician, less partisan and above the fray of congress (and especially the house of representatives). Presidents don’t debate people once in office like a Prime Minister does during Question Period – they lecture and talk, such as during the State of the Union.

I find the difference in debate styles still more interesting since they seem to run counter to the ideas Canadians and Americans have about each other and themselves. Michael Adams, when writing about Canadians and Americans in his 2004 best seller, entitled his work Fire and Ice to highlight that there was a (growing) difference between the two country’s cultures. Watching these two debates doesn’t make me believe the two country’s culture are converging, but it does feel like they are inversed.

The Canadian debate was downright aggressive. Attacks were unrelenting, constant interrupting, candidates raising their hands in despair, shouting one down. Looked at under different circumstances, I’m sure many Canadians would have considered it all to be very… American.

In contrast the American debate appeared all civilized, and yet had a strong under current of passive aggression. Everybody was very polite and on their best behaviour, even as they sought to tear into their counterpart – in a polite way of course. Watching the debate, it struck me as all very… well… Canadian.

It’s like for one evening Canadians and Americans switched personalities. We had an engaging, aggressive, uncompromising format where the issues and the people came out. The Americans candidates were forced to be polite and thus passive aggressive. Or perhaps there was no switch… it really was like hockey versus baseball. One’s a contact sport, the other isn’t. I just never thought I’d say that about our respective politics.

Obama and Web 2.0 in 1995

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Salimah E. just forwarded me this fantastic piece – from the Chicago Reader – about Obama. Part of what makes it fascinating is that it was  written 13 years ago. Just read it and look how consistent Obama’s past and present is from a values and goals perspective. This piece could have been written yesterday. What a rock that guy is.

Also interesting to read the piece from a technology angle. Consider again that it was written a decade before Web 2.0. But look at how Obama’s language and values around community building fit so perfectly with the social media technologies of today. Reading this (again written in 1995!) it becomes obvious that Obama would immediately see the potential and opportunity around online, self-organizing, social media. It explains how and why his stie has done so well. He literally lives and believes in the values of self-organizing to a degree that few other politicians do and so is willing to hand big parts of his site over to its users. (in this case users, supporters, or followers all feel like inadequate words, sigh).

Money quote:

“What makes Obama different from other progressive politicians is that he doesn’t just want to create and support progressive programs; he wants to mobilize the people to create their own. He wants to stand politics on its head, empowering citizens by bringing together the churches and businesses and banks, scornful grandmothers and angry young.”

Obama, different than other progressive politicians? Hmmm, I’ll confess that this line also makes me like the piece because it resonated with Taylor and I’s piece on the death of progressive politics. (Shameless link, I know).

The Great Crash vs. Emergence (re-mixed)

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So it is with impeccable timing that about 3 weeks ago I started listening to John Kenneth Galbraith’s “The Great Crash: 1929.” (Indeed, I wish I had similar impeccable timing when planning my RRSP, 401k and stock purchases). Obviously the events of the last week, and more precisely the events of yesterday make this essential reading for everyone.

By quirk of luck (due to a recommendation by Mark Surman) I have also been reading Emergence: The Connected Lives of Ants, Brains, Cities, and Software by Steven Johnson. Emergence is about “the way complex systems and patterns arise out of a multiplicity of relatively simple interactions.” Possibly the most easily understood exmaple of emergence is seeing how ants or termites can create complex societies based on a few simple rules.

Interestingly, although Galbraith and Johnson almost certainly never met, and their books were written over 50 years apart, they are fundamentally writing about the same thing.

John Kenneth Galbraith’s The Great Crash is about an emergent system – the speculatory stock market bubble that lead to the 1929 crash. Indeed what makes reading these books simultaneously so interesting is observing how Galbraith describe an emergent system without the language and frameworks available to Johnson 50 years later. Consequently, Galbraith’s book is hints at a larger system even as he struggles to describe how the decisions of hundreds of thousands of individuals could be simultaniously coorindated but not directed. He intuits a distributed system, but simple can’t describe it as accurately as Johnson.

A great example of this struggle is visible when Galbraith’s describes his frustration with others efforts to pin the 1929 crash on a given, or set of, individuals. I’m willing to bet that, sadly, we are about to embark on a similar misadventure: I wager the next congress is going to launch a series of hearings to determine “who” caused our current financial crises. This, as Galbraith pointed out about “The Great Crash”, will be nothing short than a colossal waste of time and energy, one that will distract us from the real challenge. This is not to say illegal activities did not occurr somewhere on wallstreet (or K street) both in recent years and in the years leading up to 1929. I’m certain they did. Nor should they go unpunsished. They should. It is just that then, as well as today, they almost certainly did not cause this crisis. As Galbraith puts it:

“This notion that great misadventures are the work of great and devious adventurers, and that the latter can and must be found if we are to be safe, is a popular one of our time. Since the search for the architect of the Wall Street debacle, we have had a hue and cry for the man who let the Russians into Western Europe, the man who lost China, and the man who thwarted MacArthur in Korea. While this may be a harmless avocation, it does not suggest an especially good view of historical processes. No one was reponsible for the great Wall Street crash. No one engineered the speculation that preceded it. Both were the product of the free choice and decisions of thousands of individuals. The latter were not lead to the slaughter. There were impelled to it by the seminal lunacy which has always seized people who are seized in turn with the notion that they can become very rich. There were many Wall Streeters who helped foster this insanity, and some of them will appear among the heroes of these pages. There was none who caused it.”

There was no one who caused it. Remember that. Galbraith wants to pin it on something large and decentralized but can’t put his finger on what it is. Consider this line “No one engineered the speculation that preceded it. Both were the product of the free choice and decisions of thousands of individuals. The latter were not lead to the slaughter. There were impelled to it by the seminal lunacy which has always seized people who are seized in turn with the notion that they can become very rich.” Throughout his book Galbraith keeps talking about a “collective lunacy” but cannot account for it. As he concedes, the desire to become rich is ever present, something in 1929 triggered a larger hysteria. Some emergent property made it vogue.

This is what we need to understand. In 1929 – as well as today – a group of people lived and worked in a system that had powerful incentives that encouraged them to engage in risky practices (in 1929 it was investing in stock on margin, today it was lending people money who simply could not afford it). Finding the people will achieve little compared to understanding the basic set of rules that created these incentives – removing the people will do little. Managing the incentives will do everything. A big part of this may involve new regulations, but probably more importantly it requires recognizing that whole new business models are required as these shape incentives far more than regulations. No business wants to go through this type of crises again. A business model that insulates them against it will be the one to copy. This is why Umair Haque’s post is so important.

Encouragingly and contrary to popular beleif, Galbraith doesn’t believe that the crash of 1929 caused the Great Depression. Depressingly he sites other problems that lead to the larger crisis – problems some of us might see as familiar:

  • A dramatic and uneven distribution of income (we got that)
  • Poor corporate structures (we got that one too)
  • Poor banking structure (check)
  • A uneven state of the foreign balance (check again, although in reverse)
  • Opaque economic intelligence (not so sure about this one).

Yikes, so we are batting 3, maybe 4 out of 5.

My biggest fear and suspicion is that this bailout, if it occurs. Will probaby not “rescue” the system. It will simply give us breathing room to adapt the system. Certainly that would have been the case in 1929, and history very much looks like an emergent system, beyond the control of a top down state, has once again taken over.