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Moving to self hosted Wordpress

As you may have noticed, I’ve been working to migrate 21Square.com away from Typepad and towards a self hosted copy of WordPress. I am hoping that I managed to migrate all of the images while maintaining existing links.

Unfortunately I am moving dpitcher.com away from the site which means any links previously pointing to it will now be invalid.  Anyone currently following the rss feeds or getting email should adjust their settings and resubscribe via the new www.21square.com wordpress site.  Please email me if you're unable to do so.

 

 

Personal import duty hikes will do more, not less, to kill retail

With their support of the personal duty hike retailers are stubbornly creating the exact opposite environment they desire.  All they're doing is increasing the competitiveness of local import firms, not decreasing it.  Today, it's a huge hassle to buy online, a path only chosen by those dedicated to lower prices or greater selection.  Tomorrow, it could be so easy that the consumer may well be able to buy online without even knowing how, with all the hassle taken out of the equation.  The day that happens, retail as we know it will be near dead and all the duty hikes will have done is accellerate our pace towards achieving it.  

It's harrowing to watch as so few see the implications that the hike on personal imports likely will do more damage than good, much like the hike at the airport did.  The intent is well meaning, but the implications of the change may not be well understood.  It is suspected that we'll see a few things result from this action.  

• People will take to boycotting local retailers and buying online out of spite due to the Chamber of Commerce's support for the hike on personal imports.
• The duty hike will kill demand for some importers causing more job losses that will not be offset by hires by local retailers.
• The government will overestimate duty revenues
• The duty hike will encourage more entrepreneurs into the import business who will make it even easier to import items on demand.  

Before I plead my case I think it's important to recognize that I'm not against an across the board hike in duty rates.  I've long advocated on this blog a hike in duty rates across the board in order to discourage the rampant addition to consumption this island suffers from.  Even today, with our rapidly rising debts duty hikes could be a good thing to help combat the problem.  However, what I don't support are protectionist policies to keep local retail afloat, not because they aren't well intentioned but usually because when you mess with the market you create unexpected side effects that you didn't originally intend for.

Ms. Elaine Murray, director of the Irish Linen Shop recently penned a letter to the editor arguing in favor of the hike on personal import duties.  The gist of her arguement, if I can do it justice, is that online shopping and discretionary spending is killing local retail.

The truth is that our global and local recession necessitates the increase in this tax and frankly, it is time to protect the local bricks and mortar retailers from any more closures which will certainly translate to higher unemployment. This is not a mandatory tax. It is a tax on your discretionary spending overseas. It is fair and it’s your choice. Keeping Bermuda dollars in Bermuda will keep Bermudians working.

The problems that I find with Ms. Murrays arguements are that she depends on three assumptions, that our local recession is largely caused by the global one (a belief not shared by this blog), that online business is responsible for the decline in retail and that brick and mortar businesses should be given special concessions over other businesses.

The belief that the local recession was caused by the global one is one which has frequently rebuted by this blog.  At it's most basic, when you crunch the numbers on the declines in the population of non-Bermudian workers, they add up to significant declines in local spending and tax revenues.  As has been argued since before many people believed the island would even enter a recession, it is out local policy which has been the primary factor behind our recession and the decline in guest workers, not global elements.  This needs to be firmly understood and rectified before we have any chance at digging ourselves out of this recession.

Next we can move on to the the assumption that online business is killing retail.  The first problem with this assumption is that we simply don't have the numbers to support the arguement for online purchases killing local retail.  It's meerly a guess.  The statistics department produces no reports on online and mail order purchases, only resident purchases abroad brought in via the airport and resident imports overall.  This poses a considerable problem as it indicates we're choosing policies based upon assumptions and not facts.  Considering the recent focus on "reality" based decision making, this seems like a glaring flaw, regardless of the outcome.

As suggested above, the decline in non-Bermudian workers is the prime culprit for declines in retail sales and online purchases are simply a correlation to local retail declines, not a primary causation.  It is very important to understand the difference.  This blog made a pretty solid attempt to approximate the impact of the decline in non-Bermudian population on the local economy and it makes for a compelling arguement.  Again, if we can regrow our non-Bermudian population, we can increase local spending and in effect, save retail.  Attacking online shopping is likely to not have anywhere the impact that retailers or government are hoping for.

Finally, let's challenge the notion that we should be saving local retail and putting it ahead of other businesses.  This is another fundamentally flawed arguement, one where people believe it is better to use protectionist policies to prop up an industry rather than strive for efficiency.  This often leads to disaster.  

One of the big questions that arises is why are retail jobs more special than other industries?  In our history we built ships, grew onions, farmed our own food and farmed flowers among other things. These industries are all gone now.  Where would we be today had we imposed taxes to protect jobs for these industries in spite of progress?  Would we still likely to be prosperous building ships or growing onions?

If we're protecting jobs for retailers, why stop there?  Why aren't we taxing all imported food at 25% to protect local farmers and fishermen?  Why aren't we taxing the internet and cell phones because of the impact it has on local telephone companies and media companies? Indeed, jobs are being lost there too.  Why are we not looking at every industry losing jobs and coming up with means of taxation to save them?  Likely because it wouldn't make much sense to do so.  Landlines are as much a thing of the past as shipbuilding.  While it is wholly unfortunate to watch as jobs decline in servicing and maintaining them, it would be entirely self destructive to attempt to protect those jobs by taxing progress.

We're not taxing these things is because we'd damage progress to do so and eventually get left behind and thats the reason why we shouldn't bail out retailers today.  The challenges for brick and mortar businesses simply aren't limited to Bermuda.  Retailers the world over are having to rethink their models and adapt to provide better service.  This isn't the first time it's occured, with retailers having faced the onslaught of catalogues and tv shopping.  The successful ones survived and adapted, the unsuccessful, rightfully failed.

The greatest problem with the proposed duty hike is that it will likely lead to an even worse situation for retailers rather than a better one.  It is harrowing to watch and realise that they simply don't see it. Duty hikes will take make importing models even more competitive.  People who today suffer through the hassle of ordering something online, coordinating payment, shipping, forwarding, and duty by themselves do so only because it is easier to do all that than buy locally.  It is only the very committed who will trudge through this path to save a few dollars or attain that nearly unattainable item.  

Tomorrow will be very different.  The duty hike creates opportunity.  All those who buy online today won't be disinclined to do so, but they'll likely search for alternatives.  They'll turn to enterprising import firms who will import on their behalf to take advantage of cheaper duty rates.  Those firms are being positioned to take advantage of the duty hikes to make ordering online and importing not only possible, but far easier than it is today.  

Budget hopes

Here's my impromtu budget wishlist to get our economy back on track.  

Reintroduce growth

• Eliminate term limits
• Relax work permit requirements for skilled jobs traditionally unfilled by Bermudians
• Eliminate red tape and delays in work permit approval process
• Cut payroll tax

Cut costs

• Introduce 12 or more unpaid holidays (one friday a month) for the civil service over the next year which would save nearly $15 million in labor costs but allow people to keep their jobs.
• Privatisation of some government services, eg public transport.  Increase support for mini buses to handle the kinds of routes regular buses cannot service.
• Eliminate GP cars and credit cards
• Eliminate non-essential spending, especially external spending and trips
• Reduce the size of cabinet
• Halt further development of low cost housing
• Change trash collection to a rotating 3 days every 2 weeks rather than 2 days every week.

Increase revenues

• Duty simplification/harmonization to a flat rate for everything but food for all types of imports, not just personal (ala the Fair Tax Cut proposal).  This would have the added benefit of reducing duty related accounting.  

The sad state of real estate

“Home buyers saddled with debt as repossessions continue”.  Sigh… this was all sadly predictable years ago.

What happens if you combine a weakening global economy with off-shoring of local jobs and a rapidly softening local housing market?

A weakening global economy means global spending is getting tighter.  While Bermuda is typically quite shielded by such events is there a guarantee that Bermuda will feel no side effects?  Further, will the off-shoring of local jobs mean a decrease in overall employment levels, subsequently decreasing local spending?  Spending that keeps many supplementary industries afloat?  Finally, what happens if the housing market continues to soften and a large number of mortgage holders (especially those with interest only loans) wake up to realize that the value of their home has dropped and they now are in a state of negative equity if they try to sell?

Why retail sales are drying up

It is very frustrating to watch as retailers come out blaming online purchases for the decline in retail sales when it is quite likely it could largely be attributed to the decline in the number of non-Bermudian workers.

Let’s follow up on a few charts we threw together back in September when the last employment brief was released.  At the time we used the 2000 census numbers as well as the annual employment briefs to approximate the impact of non-Bermudian job losses on housing demand and the impact of non-Bermudian expenditures on the local economy.

Let’s convert the approximate impact of non-Bermudian population growth on weekly expenditure chart to a bar chart (it was previously an area chart) to better appreciate the impact.

In in 2009, we saw more than $400,000 less spent than in 2010 and more than $800,000 less spent in the economy in 2010 than 2009 each week.  To put this in context, that means that each week we saw nearly $1.3 million less spent in the local economy each week in 2010 vs. 2008.  That’s nearly $68 million less spent in the economy in 2010 vs 2008, and $45 million less spent in 2010 than 2009.

Still not obvious?  let’s look at the year over year total approximation of non-Bermudian expenditure. 

Still not clear enough?  Ok, let’s break it down further, here’s the approximate impact of the year over year loss of non-Bermudian expenditure in 2009, 2010

$3 million less sent on food in 2009 over 2008, $6 million in 2010 over 2009.  The list goes on, clothing, housing, household goods, transportation, education.  This isn’t even 2011 numbers included.  Many millions less spent in the economy each year.

Still think online purchases are the biggest factor and that a duty increase on personal imports will make much of a difference?

False pretenses

Government claimed that the airport duty hike to 35% was to protect retailers.  The above chart pulled from the retail sales index reports demonstrates that this is an unfounded argument.  If overseas purchases were the cause for retail sales declines then why are they down year over year just like retail?

Frustratingly, we simply don’t make decisions based upon the statistics.  Retailers are busy trying to convince government to hike duty for personal imports to 35% as well, and yet where is the evidence to showcase that online purchases are indeed the problem?  Presently, we only collect statistics on overseas purchases at the airport and yet we should be collecting statistics on personal imports (by collating duty submissions made by the various importing firms) in order to make an informed conclusion.

If you ask me, the biggest problem facing local retail isn’t competition from purchases on the internet, it’s from the decline of people with high disposable incomes.  Retailers should be making that message well heard so more people understand the value our guest workers (aka. long term tourists) bring rather than expecting handouts.

Unfortunate passing

It is with sadness and regret that I learned of the unfortunate passing of cousin Sean at such a young age.  It is never easy losing someone of strong character and is only made worse when they’re family and dedicated to doing what they can to make the island a better place for the rest of us.  Thank you cousin for your dedication to setting a great example, I’m sorry to see you leave us so early and hope that you’ve moved on to a better place.

For those wondering, typically I don’t post anything regarding the passing of family and friends though given cousin Sean’s interest in public service I thought a few words were warranted.

Is Buy Bermuda dead?

The Bermuda Chamber of Commerce’s Retail Division has come out suggesting a standardized 25% duty rate for personal imports.  This move won’t be well received by many and could spell a death knell for the buy Bermuda campaign.  Standardizing duty rates to a flat rate across the board is one thing, raising rates for everyone while giving special concessions to retailers is another.  The Chamber risks creating a grassroots Boycott Bermuda campaign to fight their failure to find more reasonable solutions.  They should be developing better service and working on alternatives rather than begging for concessions and penalizing all others.

There are a great many who find Bermuda retailers need to do more.  In many cases, service is poor, selection is poor and pricing is poor.  In many others, it’s the complete opposite.  Those with great service are often rewarded.  Those with horrible service, sadly still get business if it proves too much of a hassle to find alternatives.  This move by the Chamber will be seen by many as a reward for bad service and will instill resentment that leads to fewer on-island purchases out of spite.  This likely will prove to be a tremendous gaff on the part of retailers as they could well end up with the opposite results they anticipate.

In the case of this blogger, I buy Bermuda where able, but also buy online.  The things I buy online are predominantly not available on island.  As an example, I’ve got big feet, 12.5W.  I struggle to find any retailer on island who carries shoes even close to this size.  Further, I have a preference for minimalist/barefoot shoes.  I have little choice but to go online.  This duty increase if implemented will negatively penalize me for being a big guy.  I resent that and I will  blame retailers.

There have been far too many cases where ordering online becomes a necessity because because Bermuda simply doesn’t have the selection and retailers refuse to do custom orders.  Knowing that retailers are perfectly willing to shift the pain elsewhere makes it evidently clear that they’re out for themselves, not for offering better service. 

I’ll happily take my business where there’s good service and pay a premium.  I tip above and beyond the included tip the when I get good service at a restaurant.  I give a good tip to grocery baggers who happen to greet me appropriately (why do so few say a simple good afternoon anymore?).  I make certain to bring my business back to shops that go out of their way to make sure I find what I need.  If they don’t have it but tell me another shop that does or a place online that I can get it, I make sure to take my business back there again.

The problem is that some retailers are ruining it for the rest.  Rather than offering better service and finding ways to make things more manageable they simply want to punish those with big feet.  Retailers have gotten greedy and this move will likely backfire.  Buy Bermuda may be dead as retailers are making a good effort to kill it.

Can we spare change?

Bermuda reached it’s peak when insurance was still in it’s infancy.  A time when Bermuda was filled with startups flush with cash.  Today, the industry is saturated and many of the now dominant firms spend far more time worrying about cutting costs.   Bermuda needs to capitalize on it’s advantages close to home and realize that there’s a burgeoning new industry, flush with capital ready to return us to prosperity.  Bermuda can and should be taking a closer look at what’s happening in the investment industry and recognize how incredibly well placed we are to benefit.  We cut our teeth by embracing on the high risk high reward prospects of reinsuring the insurance industry and could do the same with finance.

The Volcker rule has created a new battlefield over Wall Street pay that banks fear will send their star traders and hedge fund advisers fleeing.

The roughly 300-page proposal that was released earlier this month is fuzzy at best, but it makes clear that banks cannot pay their in-house top talent any type of bonuses that could encourage proprietary trading.

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However, it is sending chills through banks who fear they may lose key talent.

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Wall Street has reason to worry. High-profile traders have already left firms like Goldman Sachs and Morgan Stanley to escape the ban on proprietary trading by banks which was mandated by the 2010 Dodd-Frank financial oversight law.

As an IB exec recently pointed out, Bermuda is tremendously well placed to capitalize on the coming flood of investment startups due to appear as a result of the Volcker Rule.  To those unfamiliar with the rule, it prohibits banks from substantially owning or investing in hedge and private equity funds.  This means many top stars of the investment world will have little choice to branch out and start up their own.   Bermuda is incredibly well placed to provide a better alternative for those funds and their associated businesses to be located.  Where else can you enjoy the freedom of relaxed yet strong regulatory framework?  Where else can you show up less than an hour for your flight and be in NY in a couple hours and London by morning?  Where else can you enjoy a near non-existent commute and actually have the freedom to actually do something with your evening? 

Embracing and supporting risk has been our core strength, one we could leverage again.  Bermuda could be an excellent place to house cash flush new startups, eager to bring in top talent, spend money locally and revive our economy back to what it once was.  We should be doing everything we can to convince star traders that Bermuda is the ideal home for their business… and their money.

A Greek lesson for Bermuda?

Are there lessons to be learned in the Greek crisis for Bermuda, should we continue our trend towards financial insolvency?  Greek Prime Minister Papandreou’s call for a referendum on the country’s bailout package could be a brilliant political move, if he’s allowed to make it. 

The rest of the world may be appalled at the prospect of putting the decision to the people but let’s remember, the last bailout and debt forgiveness didn’t exactly work all that well, did it?  Why then is more of the same medicine likely to fair much better?  Will it ultimately be rejected by the Greek people and lead to even more rioting in the streets and mass unproductivity? 

Are there alternatives?  One potential solution then is to involve the people in the decision in order to quell discontent.  By letting the people own the decision, it becomes far harder for them to rally and protest against it for it wasn’t rammed down their throats but was made of their own accord.  The trick for Papandreou to achieve success is to carefully phrase the question for the people to answer.  

Relaxing Sunday shopping restrictions

Sunday shop opening restrictions should be changed so that shops can open with the only restriction being that they can’t force people to work on Sundays.  If they have or can hire staff willing to work Sundays, let them be open without restrictions.

The Sunday restrictions simply don’t make much sense anymore.  At a period where retail sales and jobs are down, allowing shops to open on Sundays could provide much needed relief. 

There are many who simply can’t find the time to leave work to shop during the week and only one day on the weekend is very restrictive.  Hence, many opt to shop online because it’s far more convenient.  Allowing shops to open more days of the week would also cause them to hire more staff to support the extra hours.  We need jobs and it’s an easy way to add some.

It is understandable there would be objection from churches, however a happy medium should be found for the sake of jobs and local spending.

Why can’t we find middle ground between popular vs. rational policy bias?

The PLP are masters at popular policy while the OBA are masters at rational policy, the problem is that in recent history, popular has won more favor.

The OBA recently announced their economic policy, which really seems like the UBP’s 2007 election platform sprinkled with some BDA ideas.  It’s nothing mind blowing and though it’s good policy, it’s the same policy that didn’t win the election for the UBP and didn’t win new support for the BDA.  If any in the OBA think that this new policy will magically gain them support, clearly they haven’t learned anything in the last few years.

Quite unsurprisingly, the PLP immediately moved to counter the OBA’s policy suggestions by capitalizing on anti-foreign bias.  Brian Caplan, author of The Myth of The Rational Voter: Why democracies choose bad policies defines anti-foreign bias as a tendency of non-economists “to underestimate the economic benefits of interaction with foreigners”.  His book, which is an eye opening understanding of how the public holds particular biases, demonstrates how non-economists generally believe that protectionist policies are more beneficial than they have been shown to be.  The PLP successfully capitalize on this bias by immediately responding with suggestions that the OBA’s plans will jeopardize Bermudian jobs.  The OBA’s response to this?  There isn’t one yet.

The problem is that one must carefully balance good policy with popular policy while leading the public on the correct course.  Both the OBA and the PLP are horrible at combining the two. 

The PLP would be well advised to take a deep look at understanding the economics behind their suggestions and actually running the numbers on things.  (Example: today’s claim by Minister Lister that hotel and cruise guests are the same when discounting hotel costs.  Sure, though one has employee’s who live on island vs. the other who doesn’t, let alone the impact on our infrastructure of adding another 2500 people when we can’t manage the ones we get now).  The PLP would be well advised to read Mr. Caplan’s book to appreciate where they could hold bias that is doing more harm than good.

The OBA would be well advised to take a deep look at understanding public perceptions and bias.  Perhaps Mr. Caplan’s book would be a good start followed up by some study of rhetoric?  The OBA should be answering back with attacks on the fact that the PLP will need to raise taxes without foreign jobs and that there were few problems with Bermudians having jobs when there were lots of foreigners working here.  Answer back to claims that term limits protect Bermudian advancement but suggesting that at least with a suspension of term limits, people would go back to having jobs.

Sadly it is easy to doubt any real change.  The PLP will go on with their populist, economy destroying policies while the OBA keeps pushing the same policies without rallying public support.  Sad to see that things are little different than they were before.

Cannonier wins. Now what?

Congratulations Craig Cannonier on being elected as the soon to be leader of the opposition.  Now what?

Mr. Cannonier needs to show the people that there is action behind his big words.  He needs to deliver on his claims that he can bring new people into the OBA.  He needs to deliver on bringing something new and different to local politics.  Can he deliver on the claims that OBA will be something very different from the UBP it evolved from?  Can he show he’s more than just talk.  Mr. Cannonier needs to get his message out there, ensure it’s heard and attract those who can help him achieve it.

Mr. Cannonier is still a relative unknown and this can work either for or against him.  In his media coverage he’s shown he likes to talk big but hasn’t shown he can deliver when push come to shove.  He needs to change this.  He’s claiming that he’s the broom to sweep new faces from the sidelines into the party.  He failed to bring in significant numbers when he led the BDA so what is he going to be doing differently as leader of the OBA?  A great first step would be leading by example by instituting direct democratic reforms within the party to restore confidence in our leaders.  If giving the people a say in the leadership of the party doubled membership then what kind of impact would giving people a say in far more issues have?

Mr. Cannonier need to work on reigning in his abundance of confidence and focusing on delivering on his claims and promises.  Some still remember his claims that the UBP should “switch off the lights”, that the UBP cannot succeed, that the BDA is the "most vibrant political movement this Country has seen in recent history" and that "The Alliance is ready to assume the role of the official Opposition of this Country".  These were big claims, claims to which he then led the BDA into a by election in which they attained less votes than the UBP.  Mr. Cannonier failed to deliver and needs to do what he can to sidestep this in the future.  We’ve certainly had enough of leadership who are big on talk and short on action, especially when most action was achieved by throwing money at the problem.

Mr. Cannonier remains a relative unknown and needs to up his political profile.  The OBA shouldn’t be relying on media outlets to do their PR work if they can manage otherwise.  The OBA should take every opportunity they can to publish every political word spoken by Mr. Cannonier up on their website and promote him as much as possible.  If he’s to be the face of a new opposition they need to ensure his face is everywhere and the first place to start is their website.  Beyond relying on Bernews to record their speeches, the OBA should be recording and publishing as much as they can on their own.  Their website needs to be a hive of activity with new content posted any and every time there is new content made.  Similarly with twitter and facebook.  People thrive on consuming new content and a good way to rope them in looking for more is to regularly provide new content.

So where does the OBA go from here?  Show their leader can deliver, chart a new course in local politics that involves the people, reign in the undeliverable rhetoric and do more to get their message out there (and not by robocall!)

People have lost confidence in our leadership

The UBP’s legacy isn’t the problem.  The problem is that people have lost confidence in our leadership.  If the OBA wants to succeed they need to focus on regaining confidence, not new names, faces and radical new leaders.  The OBA needs to offer something different, not just new window dressing but a new political process that involves the people and restores confidence.  The OBA could take a deep look at existing forms of direct democracy and find ways to adapt them to work here.

Tom Vesey sort of gets it when he suggests that in order to succeed “the OBA needs to offer something genuinely new”, though like many others he then gets caught up in the UBP's legacy as the issue.  The UBP held power for 30 years because they held the support of the middle class swing vote, which they then lost.  None of the elections since have been landslide victories but instead won on the basis of handfuls of seats.  The PLP has done such a brilliant job of painting the UBP’s legacy and race as the core problem that old UBPers believed it, BDAers separtists believed it, newly formed OBAers believe it as do former and current newspaper editors.  It is falsely shaping the driving force behind the OBA's strategy and yet it may be off the mark because people want more than new faces, they want a new approach.

Here’s where I think Mr. Vesey is spot on:

[The OBA] has to be promoting and presenting itself as something new — a new party, a new idea, a new way of conducting politics in Bermuda.

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As the OBA positions itself for the rough election road ahead, it needs to make sure it is more than just a critic and more than just an “alternative government”

It must at all costs offer something genuinely new — an alternative WAY of government.

The OBA sort of gets it in that they’ve committed to increasing democracy, though their implementation could go further.  People need to be able to regain faith and confidence in their ability to lead and a likely route to success is to give more power to the people. 

If we look back to the example of the declaration of American independence, people were hungry for a change in how they were governed. They were tired of Monarchist rule and unjust taxation, they’d lost confidence in their leadership and wanted more say in governance. The founding fathers turned to the inspiration of William Penn, founder of Pennsylvania and his idea for an amendable constitution.  Penn understood that people are more easily governed when they feel they have a greater hand in governance.  He said as much in Fruits of Solitude.

If the OBA hopes to succeed they need to provide new and modern means of accommodating dissent and embracing new ideas.  Our current representative system just doesn't go far enough for it was designed for a colonial age long past.  We live in an age that travels at a far faster pace and is far more connected than during Penn’s time and thus we need to offer modern approaches.  We need a system that offers the people not only representation but also a more direct hand in governance.

The OBA deserves considerable credit for setting the bar higher with their pledges for referendums and intent on allowing internet voting for their upcoming leadership election.  However can they be doing more to make people feel heard and like they can make a difference?  Can they enable people to have a greater hand in governance and can they do more than talk about it but also demonstrate how they can deliver on it?

We're told things like:

“One of the core elements of the OBA’s better governance platform is to engage the public more directly in decision-making. One aspect of this objective is the use of referenda to measure public opinion, particularly on controversial issues”

These pledges are excellent, though part of the problem is that people don't really understand what the OBA is talking about when they say better governance.  Some might wonder if the OBA themselves even understand it.  What is meant when the OBA calls for a referendum?  Do they mean “Gambling:  tick yes or no” or are we talking about something far more substantial?  Most Bermudians have vague ideas of what referendums are and thus we have no idea what it will look like.  We need samples and rather than talk about it the OBA could make more of an effort to provide clear working examples by enshrining them in the foundation of their party function.  Referendums and direct democracy should be placed at the core of how their own party operates as a demonstration of how they would work.

This leads us back to the question of whether people understand what better governance really means.  One example of better governance would mean developing our legislative framework such that the people are provided the opportunity to be more involved.  Referendums are a likely answer, though it is important that people understand what referendums are and the process which could be followed.  Certainly one would be well advised to avoid the California model, it has been an disaster.  The Swiss model on the other hand has been a shining success that has worked well for over a century.  What is the Swiss model and how could it work here?   The OBA could be reading and borrowing liberally from the Guidebook to Direct Democracy for ideas.  Here’s a short summary example of how Bermuda could be approaching it (with parathensis for party specific examples).

1. Start with an initiative to institute a new law.  It could be a law (policy or position in the case of the party) to resolve any issue (eg. gambling) of which the initial trigger can come from individual voters (party members) or interest groups.  These individuals would file a petition to start an initative which has the support of a certain minimum number of signatures.  An initiative could also be triggered by parliamentary (or caucus) representatives.
2. Work out a preliminary draft.  Appoint a bi-partisan committee (or interested party members) composed of those who have interest in the initiative law to put together the preliminary draft.  Put this draft out for consultation and request formal opinions and proposed changes from related organizations and interest groups.  On the basis of the feedback, revise the draft and send it to a national council (Caucus) for review and consideration.
3. Debate the draft.   In parliament, open the draft for debate (within the party, perhaps assign groups to openly debate the draft in a town hall format) and request a formal opinion to be compiled by each side to be presented alongside the original draft.  Revise the draft according to the opinions gathered and resubmit for debate.  Continue revising and resubmitting and if after three rounds of debate there are still differences seek to call an agreement conference comprised of members of each side to seek a compromise solution.  Put the final solution to a national council vote.
4. Seek open public feedback.  For issues triggered by parliamentary (or caucus) representatives, make the law (party policy or position) subject to an optional referendum by setting a reasonable timeline (100 days?) for the people to petition for a binding referendum to be held on it.  For issues triggered originally by petition, make a referendum a binding requirement.  Ensure constitutional changes are binding to decision by referendum regardless of the source.
5. If supported or unopposed put the new law into force.   If 100 days pass without enough people petitioning for a referendum or a referendum being called and the majority approves it (or their is not enough turnout) then put the new law (policy or position) into force.  If a referendum is held and the majority oppose it, scrap it.  

The important factor is to provide a binding means for the public to start an initative and have it put to a referendum.  This gives the people faith that they can require our leadership to address and resolve an issue by way of referendum.  It also gives people the faith that any new law can be placed under the requirement to be put to a referendum.  It also provides a valid process that can avoid the pitfalls of people simply petitioning for “free beer” or against any and all tax increases without consiquence while empowering any individual or group to feel like they have a say.  Further it provides people a valid means to petition against a new law to which the people disagree with.  Other requirements such as big budget expenditures crossing a certain threshold could also be required to be supported by way of a referendum.  Such a structure would go a long way to offering “something genuinely new — an alternative WAY of government”.  It'd be far more encouraging than a new name and new lead for the same old boring play.

Those interested in knowing more would be wholly encouraged to read the Guidebook to Direct Democracy, it is a relatively short read which covers the history, successes, implications and successful implementation of direct democracy in Switzerland.

How do we get our economy rolling back?

Regarding my previous post Monaco style exemption zones could rejuvenate our economy Kathy writes:

Sounds like another Jamaica in the making.  Shove some Monaco type high wealth individuals behind a guarded gate at Southside and make sure the shanty towners outside don't break in.  I think his idea was well served in the 1930's but in 2011 Bermuda has to get its crime under control, put the average blue collar worker back to work and get the economy rolling back.  I do like the idea of residency certificates, but not to the elite...Bermuda is and never will be a Monaco I am afraid!

Now certainly it was not my intention to suggest the creation of gated communities.  Instead the implication was to use zone restricted residency certificates as a means to encourage investment which results in job creation.  Perhaps I failed to make my point clear enough or Kathy would be kind enough to clarify why she thinks this idea would be unsuccessful.

Kathy raises an interesting point “Bermuda has to get its crime under control, put the average blue collar worker back to work and get the economy rolling back”. 

How exactly do we do that? 

Contrary to what union officials believe, we can’t simply require companies to hire people when they can’t afford to do so.  Bermuda is reliant on attracting foreign wealth to sustain itself.  Long ago we exported our natural resources in the form of agriculture and ship building, then we leveraged our natural beauty and good natured people to develop tourism and finally we leveraged our tax friendly nature to heavily increase our employment base so we could attract foreigners to live here as “long term tourists” and spent considerably in our local economy year round. 

Today, we don’t have enough natural resources, our good natured attitude has disappeared and we’ve been driving away our “long term tourists” with xenophobic policies and attitudes.  If we sit around and wait for things to magically right themselves it would come as no surprise if we do follow in the footsteps of Jamaica.  We cannot put the average blue collar worker back to work if we lack demand for unskilled labour.  Unless someone has a revolutionary new idea of how we can expand our tax base without driving it away we can’t simply continue the trend of expanding the civil service. 

We have little choice but to do everything we can to reverse the trend of declining spending in our local economy.  How can we do this aside from reversing the trend of driving away guest workers and foreign investment?   Beyond this, we should be doing whatever we can to reduce our cost of living to make Bermuda more affordable and retrain Bermudians with the skills necessary to earn a manageable living.  If we can do this, we’d be on our way to getting our economy rolling back, putting average blue collar workers back to work and hopefully putting a dent in crime instigated by the jobless and those who’ve lost hope in Bermuda’s future.  Creating Monaco style zones could offer considerable leverage to help expedite the process.  Otherwise, what solutions are there?