Halifax’s sad pursuit of the financial industry

News

1. New bus routes

“On Monday, bus routes in Halifax will undergo their biggest change ‘in at least 30 years,’ says Patricia Hughes, manager of planning and scheduling at Halifax Transit,” reports Examiner transportation columnist Erica Butler:

Mostly affecting Clayton Park and Fairview (all but one route at the Lacewood terminal), the Monday route changes are part of the five-year-long implementation of the Moving Forward Together plan, which aims to move Halifax closer to a simplified, transfer-based bus network.

Routes 2, 4, 16, 17, 18, 21, 23, 31, 33, 34, 35, 42, and 52 will be replaced with three new corridor routes, four new local routes, five expresses, and one rural route.

Butler goes on to outline many of the changes. Because the new routings affect so many people, I’ve made Butler’s column publicly available for everyone. Click here to read “Monday’s big changes to bus routes could be good news.” (But for this public service, you should subscribe anyway.)

This bit is particularly interesting:

In its recent quarterly report covering the first three months of 2018, Halifax Transit reported that the last set of Moving Forward Together changes, which took place in November and focussed on the Spryfield area, yielded a whopping 26 per cent increase in weekday ridership over the same period last year, along with healthy 13 per cent and 20 per cent increases for Saturdays and Sundays respectively.

2. Public money for private developers

“John Phalen, manager of economic development and major projects for the CBRM, went to council on Tuesday morning with a request for clarity on the municipality’s planned contribution to a new central library,” reports Mary Campbell:

His sudden need for clarity was driven not by the need for a new central library (although that’s very real, as anyone who sits on the library committee, or works at the aging McConnell Library in Sydney, or has tried to read there on a hot summer day can tell you).

No, it was driven by the requirements of Harbor Royale Development Ltd, the private group led by Martin Chernin that plans to develop the Sydney waterfront from the Marine Terminal to the Holiday Inn — with a publicly funded library smack dab in the middle of everything.

…

But why are the “proponents” — private developers — responsible for negotiating with the province and feds for public money to pay for a public building?

Click here to read “CBRM Council: Entrusting a Public Library to a Private Developer.”

As with the Examiner, the Cape Breton Spectator is subscriber supported, and so this article is behind the Spectator’s paywall. Click here to purchase a subscription to the Spectator, or click on the photo below to get a joint subscription to both the Spectator and the Examiner.
White space

3. Crosswalk safety promotion

The city this morning issued a Request for Proposals (RFP) for firms interested in producing marketing material for Crosswalk Safety Action Day 2107 (CSAD); the RFP can’t decide whether CSAD is November 5 or November 29, but whichever day it is, the campaign will run from September 17 through December 10. Reads the RFP:

The 2018 campaign will generally build on the strategic direction from previous campaigns and reflect the need to promote CSAD (tentatively scheduled for Nov. 5, 2018) while building awareness of the reality that everyone is at risk of both being a victim and a contributor to the cause of a collision.

Importantly, it notes that the successful bidder will:

Develop innovative and compelling ways to directly engage active drivers in the campaign given past criticism that pedestrians are unfairly the main target of previous campaigns’ creative and narrative.

Views

1. Tickets

“Have you been following all the fun people are having with Halifax Transit’s announcement of a new BIG ticket?” asks Stephen Archibald:

Fun and outrage. The new ticket will be the size of a $20 bill.

Suddenly folks are interested in ticket design, so it seems like the perfect moment to share my little collection of, and my enthusiasm for, tickets. Case in point, [above] is a 1960s Halifax bus ticket compared to the one now in use (and a loonie for scale). NS Light and Power operated the trolley buses that were powered by electricity. The signature of the President and General Manager is a nice formal touch.

And of course Archibald has a collection of “printed ephemera” that he has been gathering since 1972, all stored in Hangar 51 out at Cove 17, and he shows it off at the link.

Noticed

The above video from Halifax Partnership promoting Halifax as the to-go place for financial services firms fell onto my Twitter timeline yesterday. I’m no video producer, so what do I know?, but the vid seems amateurish and clunky to me. I kept wondering why I was looking at so many blank rooftops; it was like someone got a new drone and didn’t know what to do with it.

Beyond that, however, the sell seems kind of pathetic: “halfway between San Francisco and London”? Why does that matter? There are no direct flights to San Francisco from Halifax, and even if there were, so what? Halifax is also halfway between Timbuktu and Nome, Alaska, if anyone’s interested. And oh boy, we’ve got so much empty Class A office space we’re giving it away.

But what really stands out is the premise of the video: Halifax still wants financial services firms to move to town. It reminds me of a conversation I had with Stephen Lund, back when he was running Nova Scotia Business Inc. I recounted it in this article (which is still the best explainer of how we got the Nova Centre, if I say so myself), which I wrote in 2010, just after the global financial industry had collapsed and wiped out the life savings of millions of innocent people around the world:

The pursuit of the financial industry went into high drive on July 31, 2007, when Lund and Halifax mayor Peter Kelly hosted a luncheon in City Hall’s Halifax Hall, with guest speaker Robert Gavin, a Citco manager. The entire Halifax city council was invited, and present were most of the Greater Halifax Partnership and NSBI.

“The room was really crowded,” recalls Halifax councillor Linda Mosher.

Halifax could be the “‘next Dublin,’ referencing the Irish capital’s emergence as an international financial servers centre and one of the strongest economies in Europe,” wrote Lund in the invitation to the luncheon. “Mr. Gavin’s experience in leading centres around the world has helped shape [Nova Scotia’s] strategy to grow the sector here and to maximize opportunities for businesses in many different industry sectors.”

Dublin, Lund later explained, went from being the “basket case of Europe to the number-one-performing city,” implying that Halifax could do the same. Thanks in part to the luncheon, politicians from across the spectrum accepted that courting financial service firms was a worthy pursuit.

…

This week, Dublin’s banks are in freefall, and Ireland is talking of lowering its minimum wage, slashing social spending and raising income and property taxes on individuals. (But, heeding warnings from Google, Inc. and the business establishment, taxes on corporations won’t be raised; trickle-down works in reverse, too — the suffering is limited to the lower classes.)

Is Lund now embarrassed with his 2007 claim that Halifax could be “the next Dublin?” “Absolutely not,” he answers. “I’d love to be Dublin where they were a few years ago, and learn from what they did right, and also learn from what they did wrong. There’s no question that Ireland was the gold standard, but they let things get totally out of control, and I’m hoping that we take a good look at that and realize what they did right and what they did wrong.”

…

Lund says that the collapse of 2008, and the ongoing crises, is just a blip in the long march of history.

“The economy’s always going to go up and down,” he says. “We’re always going to face opportunities and challenges. The financial industry is not going away.” NSBI will continue to pursue financial services, he says.

At the time I interviewed Lund, I thought: “This guy is as dumb as a bag of hammers.” I mean, the global financial industry had just imploded, evaporating trillions of dollars in paper wealth with it. The whole thing was exposed for what it was: an elaborate ponzi scheme selling complex derivatives and other financial instruments that no one on the planet truly understood, and while the financial instruments were based on valueless assets, the trade in them always seemed to enrich a small subset of humanity at the expense of the rest of the planet. Doubling down on the financial industry, I thought, was the epitome of stupidity.

But then, in 2010, I didn’t fully appreciate that there are thousands of bag-of-hammer dummies like Lund all over the place, and especially in positions of power, people who are purposefully dumb because they’re in on the gravy train.

Lund’s gravy train took him all the way to the chuckwagon in New Brunswick, so maybe that’s not such a great analogy. It’s perhaps better to say they were so self-interested they were blinded to the unethical game they were playing.

The play went like this: don’t change a damn thing, don’t reel in the banks or the rest of the finance industry, certainly don’t charge thieving bankers with crimes and imprison them, just bail them out with taxpayer money, institute austerity to pay for the theft and introduce the insulting notion that helping everyday people instead of the bastards who caused the thing in the first place would be promoting “moral hazard,” and continue to milk this thing out.

Turns out, there’s a lot of money in servicing people who loot the planet. Well, until there isn’t, but when the inevitable next collapse comes, they’ve got theirs, is the thinking.

During and after the financial collapse, I started reading everything I could get my hands on about the financial industry. I read Matt Taibbi’s Griftopia (which memorably has a chapter on Alan Greeenspan titled “The Biggest Asshole in the Universe”), Michael Lewis’s The Big Short, everything Paul Krugman and Yves Smith wrote, and much, much more. But I’d like to point you to two analyses that I think deserve more attention.

The first is “Infinite Debt,” a remarkable 2009 essay by Chicago labour lawyer Thomas Geoghegan that was published in Harpers Magazine. The article is behind Harpers’ paywall, but he was interviewed about the article on Democracy Now (here and here).

Geoghegan argues that the elimination of usury laws (the caps on interest rates) in the 1980s and 1990s is what led to the financial collapse. Before that, finance was a necessary part of the economy, but always sat a bit in the background. There was nothing glorious about it, not something that the best and the brightest rushed to take part in. The children of the wealthy once trained to be engineers, doctors, military strategists, diplomats, what have you. But after the usury laws were abolished, those elite abandoned more virtuous pursuits and concentrated on financial services. There was just too much money to be made.

Geoghegan points out that Henry Potter, the banker villain in It’s a Wonderful Life, would be by today’s standards the most ethical banker going: he expected what now seem like puny returns, he demanded that his loans pay for assets of real value and be backed with solid collateral, and he made sure that those receiving the loans were of solid character. (Sure, that’s a bit of a misread of the movie.)

The point is that placing the financial industry in a privileged position relative to everything else on Earth perverts human values. We should think long and hard about that, whether we’re running a central bank or just running economic development agencies in a podunk city halfway between Timbuktu and Nome, Alaska.

The second analysis is much more recent, from Ann Pettifor, an economist who predicted the 2008 collapse and who is now an advisor to Jeremy Corbyn. Last month, Pettifor gave a lecture at the London School of Economics, “Can Society Once Again Make Finance Servant, not Master, of the Economy?” It’s recorded here as a podcast.

Pettifor’s lecture is a great explainer of how we got where we are now, and why another financial collapse is inevitable. In particular, she shows what’s behind the global real estate boom, which is pricing people, especially young people, out of affordable housing all over the planet. Pettifor explains that because the ills that led to the 2008 collapse were not cured, but rather doubled down upon, there is in effect a continuous coup d’etat by the financial industry, and enormous amounts of money in their hands — so much money, that they can’t just stash it in banks, but rather invest it in rent-seeking ventures like real estate. (“Rent-seeking” doesn’t refer to just rents paid by tenants, but the entire range of continuous income streams that investors want which don’t rely on providing anything of actual value — from bank fees to Uber charges to Netflix subscriptions; the apartment or the ride or the film have value, but simple ownership of them does not.)

After listening to the lecture, I felt I had a better understanding of all the construction cranes around Halifax (and everywhere else), and it left me feeling apprehensive.

Pettifor won’t predict what will be the proximate cause of the next collapse, but it could be anything seemingly mundane or otherwise inconsequential. Turkey? Maybe. But we could wake up one morning and find that futures based on Australian corn or some such under-performed, and the next thing we know our houses are being foreclosed upon.

Things are really messed up. There’s no clear ethical path in such circumstances. We all need to live in the world we have, not the world we want, and that includes some involvement with the finance industry. But I don’t see why people who supposedly are planning our economic future (they’re all full of shit, you know?) are betting that future on something as odious and corrupting as the financial services industry.

Government

No public meetings.

On campus

No public events.

In the harbour

6am: ZIM Monaco, container ship, arrives at Pier 42 from Algeciras, Spain
9:30am: Nolhanava, ro-ro cargo, arrives at Pier 36 from Saint-Pierre
1pm: Surfer Rosa, oil tanker, arrives at anchorage from Montreal
4:30pm: ZIM Monaco sails for New York
5:30pm: Surfer Rosa sails for sea
6pm: Oceanex Sanderling, ro-ro container, sails from Pier 41 for St. John’s

Footnotes

I’m burned out. Yes, I don’t have it hard. People who work in restaurants or digging ditches or as healthcare providers or as bureaucrats all have it harder than me. But still, the day-in, day-out, the constant barrage of communications, the people I like who I can’t respond to, the unrelenting criticism and hate, the thousand details of running a business have exhausted me. It’s time for a break.

And so for the next two weeks I’m on vacation. We’ll have guest writers for Morning File, and some normal reporting and columns, but I’ll try to stay mostly off the radar.

I fear I may have to pop in for a day or two, but hopefully not. Hopefully, you won’t see me until September.