It’s not just companies…

September 30th, 2007 by De Onion

If Bermuda loses international industries at a greater rate than is natural then it also loses the best and brightest Bermudians who work for them. I’ve been talking to a few friends who work in international companies, and we all have our personal exit plans just in case we need them – and actually, most of the best of us have been given the option to work in other offices and have either taken it up or decided to stay. If you’re good enough at your job to be a standout in Bermuda then in most cases you’re good enough to be solid anywhere.

Not only that, but because of the small size and high-level work done at many Bermudian offices, the people working in Bermuda are exposed to more in a shorter/steeper career path and more highly paid for it than virtually anywhere in the world. There’s much to be said about the small size of Bermuda making it possible for a guy five years out of college to be on a first name basis with internationally respected senior executives in their industry.

The people who lose the most in the long-run in Dr. Brown’s Bermuda are the people working in the local economy who are dependent on the foreign exchange income produced by the highest-skill Bermudians and expatriates who work in International Industries.

Keep this in mind.

Worst. Law. Ever.

September 29th, 2007 by De Onion

I’ve decided to have a quick run through of the proposed draft off the Workforce (in)Equity Act 2007 (another Orwellian name for a law that explicitly promotes inequality). My quick and dirty marked up copy is here. Disclaimer: I am not a lawyer and do not play one on TV.

As one would fear this is a poorly drafted law rife with inconsistencies, poorly defined, cheaper to circumvent than implement, probably unenforcible, implies anti-white Bermudian discrimination (in ways that the drafters probably don’t understand), and will almost by definition fail in its demographic goals.

It’s a loser in every way possible and will simply draw attention from the cultural, educational, social, and economic headwinds that are the real source of inequality.

But now on to the law…

Stuff I wrote before giving up because I’d be at it all day and it’s nice and sunny today:
- Implies that Bermudian employees can’t quit and move to another firm if they are poorly treated.
- Implies that CURE and the Human Rights Act don’t work.
- Assumes unequal opportunity in the workplace on a racial basis. Objective (non-anecdotal) data does not exist and is not presented to support this conclusion if one controls for education, experience, and other factors that are correlated to both race and life outcomes (working hours, attitude, age of pregnancy, income level of parents, smoking, obesity, etc.) In addition, this already falls within the boundaries of the Human Rights Act. What the data does support is differences in educational achievement – which is really just an argument for school vouchers, charter schools and up to 100% government subsidy of further education (based on financial need) – much of this happens to be the UBP platform.
- Achieving equality requires unequal treatment.
- Bermuda labour is defined as all of Bermuda’s workforce, which includes non-Bermudians. Therefore, in order to achieve the stated aim of equal representation of black Bermudians in any given occupational group as exists in the greater labour pool it is also necessary to ensure that black Bermudians are not over-represented (as this will imply a deficit elsewhere). Since the act explicitly states that its provisions apply to the Bermuda Government department it is therefore necessary for a resignation of a portion of the Senate and Cabinet Office and replacement by equally qualified whites to ensure that companies have sufficient black Bermudians to have a chance to be compliant (yes, that’s absurd, but a mathematical truism).
- Implies that smaller (local) companies or government don’t hire more blacks (who are on average less well educated thanks to public schooling), as this would make section 4(b) mathematically impossible.

The only way that this law is the government “bending over backward” is that they appear to be pretty far back compared to businesses and by extension, the people of Bermuda, who will be bent over and ravaged.


Recommended standards for compliance.

Ensure that a new legal entity is created for each 39 people – then enter into a services contract with the master company. This should circumvent data collection and reporting requirements.
Alternatively, ensure that there are no more than 39 “key” people in Bermuda necessary to establish mind and management – it may be possible using this strategy to almost entirely avoid any direct impact of either the 6 year work permit policy (as key people are exempt) and the Racial Quota Act as turnover will be low and available positions will have sufficiently narrow requirements as to sidestep both.

If neither of these solutions is practical then the act relies on a dual definition of “Black Bermudian” – The objective definition includes all humans as we are all of “black African origin” based on DNA evidence collected around the world. The subjective definition is a self-report by the employee of racial status, and therefore all Bermudian employees should classify themselves as “black” and if necessary dress like Vanilla Ice, or alternatively Ali G.

The crux is this: In order to support this law, one must by definition lack the basic critical thinking skills necessary for almost any professional position. I think that’s perhaps the real problem – the people proposing and drafting these laws have not been able to succeed in the professional world because they lack the necessary skills and then blame their lack of advancement on skin colour, rather than their own weaknesses.

The International Business Myth

September 27th, 2007 by De Onion

There is a myth that somehow Bermuda has made itself overly reliant on international business and that therefore we should “invest” in things like longline fishing and tourism. This is utter garbage and reflects a complete failure to understand the following:

1. What international business is.
International business is not a monolith. We have investment firms, trust companies, insurance, reinsurance, law, accounting, fund administration, niche management companies, and a number of others that I am no doubt forgetting at the moment. On the outside they all look the same to the untrained eye – just a building with desks, filing cabinets, and computers – but in reality the only things they really share are the need for stability, access to skilled individuals, and a consumption based taxation system. Each industry has their own specific needs, but the three basic needs that they have in common are entirely in the hands of our government and so our risk from being overly reliant on international business is only a product of the risk that our government will do something to upset one of those three.

2. What our alternatives are.

Any “diversification” is usually accompanied by large subsidies to make up for the lack of open-market competitiveness (long-lining, tourism), and almost by definition moves resources of people, housing, schooling, land, construction, government, and everything else from somewhere they would be earning a high return to somewhere it earns a lower return. Not only that, but forcing in uncompetitive industries also creates a need to import more people, which lowers our standard of living. On top of all of this, many of these “diversifiers” are not competitive without a huge drop in the amount of international business, which would lower our wages, wealth, housing costs, and in the process make us much worse off – and actually competitive with the second and third world jurisdictions that specialize in those areas now.

So in summary.
International business is not a “pillar” of the economy – it’s several that look the same to the untrained eye.
Alternative “pillars” of the economy cost us more than we gain from them.
The only threat to all international business is corrupt and incompetent government.
Other industries would be competitive if business left and wages fell.

Fight fire with kerosene.

September 26th, 2007 by De Onion

At one time passing bumbling inefficient and wholly ineffectual licensing legislation and banning the sale of high-end properties to non-Bermudians with the intention of reducing the amount of non-Bermudian beneficial ownership. At the same time:
- Allowing Elbow Beach to build rental accommodation – and rental income is a HUGE source of foreign exchange and wealth, probably the single largest source as virtually 100% of the housing expenses paid by expats goes straight into the pockets and NAV of Bermudians in the form of rental income.
- Fractional ownership at Southlands
- Fractional ownership at Tucker’s Point
- Allowing HSBC to own the Triminghams site.
- Club Med
- Ritz Carlton

What else? Let’s have it.

Why?

September 26th, 2007 by De Onion

This is probably a post I should have written after a few glasses of white wine. It always makes things flow faster.

Anyway.

What are we racing for ?

I was standing with another twenty-something friend on the porch at of a multi-million house the other day and he said to me “I wonder if we’re ever going to have this?”

That’s the real problem with economics, with growth. Its aims – the unrestricted pursuit of profit does not lead to the greatest quality of life. Jstarling made a comment in another post about the aims of economics. It’s a huge topic, but one that deserves a good answer, but that will have to wait till another time.

But back to Bermuda…

The problem is not the expariates – they are our lifeblood. They are doing what is rational, what is in their best interest, as they should.

The problem is not the companies – they are our lifeblood. They are doing what is rational, what is in their best interests, as they should.

The problem is the government – which sucks our lifeblood. They are doing what is rational – robbing us blind while pissing away our quality of life in the name of a headline and a photo opportunity.

So that leaves us. The people of Bermuda. We need to do what’s rational and push for a higher standard of government.

I’m angry. Why? Because the government should know this – and be competent enough to develop policies that will actually deal the people’s aims… and the problem we all know exists is simple, it’s that BERMUDA’S QUALITY OF LIFE IS DECLINING.

If the government were concerned about this problem they would:

Stop screwing around with racism.
Stop stealing.
Stop puffing themselves up.
Stop getting expensive reports produced.
Stop blaming.
Stop spending.
Stop talking about “creating jobs”.
Stop selling our limited resources for a handful of dollars we don’t need.

Start understanding the economic system.
Start understanding the consequences of actions.
Start drafting sensible legislation.
Start talking about happiness of the population.
Start setting specific realistic goals.
Start managing.
Start achieving.
Start limiting growth to the highest value added.

It’s almost enough to make me want to take my dad’s advice and say “forget this” and go spend my time with the people who matter and make as much money as possible. Probably not bad advice, because Tucker’s Town is still a nice place to live.

We are all African.

September 25th, 2007 by De Onion

From the New Onion Department of Perspective:

Link

The most recent ancestor of all males living today was a man who lived in Africa around 59,000 years ago, according to an international team of researchers.

“You can ultimately trace every female lineage back to a single Mitochondrial Eve who lived in Africa about 150,000 years ago,” said Dr Spencer Wells of the Wellcome Trust Centre for Human Genetics in Oxford, UK, who was part of the team.

Keeping score.

September 24th, 2007 by De Onion

So while the PLP leadership are trumping the latest headline gathering self-aggrandising missteps in policy the following is also occurring:
- Nobody is answering the phone at the Post Office today.
- Taxis dispatching is still terrible – so rather than address that people are getting poor service and taxi operators are getting a low return on their time, rather than develop a workable solution to ensure that the several hundred taxis on the island are efficiently used and dispatched, instead the answer is to force an expensive solution down driver’s throats – when that fails, raise rates. Everyone gets a pony! (except of course for everyone who isn’t a taxi driver or PLP MP).
- Promoting small business, and spending lavishly on “empowerment” but putting a moratorium on truck permits which prevents new businesses from starting up, and does nothing to affect traffic. Unless you’re a PLP supporter, in which case importing commercial limousines is fine.
- Licenses intended to prevent foreigners to gain more beneficial ownership of Bermudian property – that really just prevent Bermudian-expat couples from buying. Meanwhile Saudi (foreign) owners are given permission to build dozens of ugly rental apartments on land they own.

On another note…

Many of us are baffled and frustrated by the multiple month long planning application process and difficulty it adds to providing housing in this crazy market. Therefore, I would like to offer my congratulations to the government for unveiling of the Planning Department tracking website. Truly this website is a bold and innovative solution to a problem that shouldn’t exist in the first place.

Ignorance is strength.

September 22nd, 2007 by De Onion

For the record – Goodwill Plus – is in the American style of naming something positive (Patriot Act, No Child Left Behind, etc.) that is in fact a terrible idea.

Controlling the language – nicely Orwellian.

Bermudasucks (I hate the name too) had a long thread on this

The blatantly obvious.

September 19th, 2007 by De Onion

I have a hard time with this article about 1,000 jobs being added to the economy every year. Why? Because to anyone who is paying attention to the jobs section of the Royal Gazette, the building industry, or pretty much anything else knows this… anyone with a background in economics that is. And that is the great challenge – to take the very basics of supply and demand and put them in terms that even politicians can understand. At least politicians who have no business or economics background, which unfortunately is most of them.

So what’s going to happen
- Housing is going to go bonkers. No construction managers because they’ll be on big projects (like the 8 office buildings going up now in town, plus at least two major hotels), combined with falling US interest rates as the USA heads into recession… which will employ people who we don’t have houses for. And the private market won’t be able to build fast enough at all, and the government will inevitably make it worse by diverting resources or failing to manage their bureaucracy. This will send construction prices and housing costs up big time.
- Anyone who competes with foreigners for their jobs (construction, accounting, low/mid-level intl business, wage earners in general, etc.) is going to be squeezed big time since the open door immigration policy will not allow wages to rise (and we probably wouldn’t want them to too quickly).
- Anyone who owns a construction firm or other business that plays in the local market to service them is going to make a shitload of money.

Sound familiar?

Some questions for the doctor…

September 17th, 2007 by De Onion

Further to some of the questions raised by the Bermuda Sun

Dear Dr. Brown,

Does the change of Winterhaven from residential to commercial violate a policy you put in place?
How much will patients be charged for treatment?
Do foreigners now beneficially own the property?
Why is Bermuda a cost-effective jurisdiction?

Thanks for reading,

DeOnion