Bankruptcy: A population perspective

Financial Post, Toronto

Unknown Day
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Selling the University Library

So the University of Toronto would like to sell off its libraries; or at least lease them out for 15 years. What a way to try to raise money! The University should be a pillar of excellence and integrity; a symbol to the workaday world. Once the University scurries around in the pages of the Income Tax Act to find some obscure provision that, in collaboration with some cash-rich company it can exploit, the University is behaving little better than the worst of the research incentive flippers.

The University ha sunk to new depths in creating a loophole in the income tax law. And I think it is the creation of a loophole. My understanding of the tax act is that a deduction is allowed on depreciating assets to allow a company to purchase and write off productive assets that have a reasonable expectation of generating a profit. My personal library is a productive asset and can be written off against my consulting income. Some years I even make a profit. How is the University Library a productive asset for an oil company or an automobile manufacturer?

Where is the reasonable expectation of profit from this particular leasing activity? If it is not a productive asset, then the company has no moral right to write it off against productive income. The company may have the narrow legal right; but morally it is just engaging, with the University as accomplice, in something close to tax evasion.

The U of T should have no part in such a plan. The treasurer of Ontario is to be applauded for his stand on this issue.

There are also a host of practical implications concerning the control of the assets (the library). Are all employees of the company to be issued with library access cards? That at least would give some semblance that the asset was a productive one for the company. Would the company be entitled to direct what additions should be made to the library and what books were to be de-accessed; getting rid of muckraking company histories for example?

Then there is the knotty question of ultimate ownership. Can the sale and lease agreement be made so watertight that the University is the ultimate recipient of the library? what if the owning company is taken over; what if it needs to raise cash; what if it goes bankrupt! I think that in such situations, the assets might be under legal dispute for years and i an extreme case faculty and students banned from using them. Only lawyers could get rich from such events.

This whole episode underscore the North American disease: fine minds are spending time shuffling paper assets rather than getting on with the job of improving productive activity. Successive governments of course face some blame for the chronic underfunding that has lead to these creative machinations. But tax games are not the province of the University and certainly not of the provincial university. The University knows better; it should live by the spirit, not the letter, of the law.

The famous library at Alexandria had the privilege of being burned. Those of Ontario's universities are about to suffer a much worse fate: being privatized.


University of Toronto Bulletin

Op-Ed: Customer desertion heightens Canada Post's problems

 Financial Post, Toronto
Unknown day
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Adolescent Antics of the Prime Minister

Published: Globe & Mail, Toronto

Prime Minister Pierre Trudeau was an ornament to his office and to Canada when he exhibited both intelligence and style. His style has now degenerated to the lowest common denominator of the "finger" salute. His intelligence has now degenerated to that of Marie Antoinette: when people ask for jobs, he tells them to go out and find work.
Really, it is time for his resignation.
Martin G. Evans, Toronto

Groupthink can be Disasterous

Published: Financial Post, Toronto

In the past, a ruler would be very likely to execute a messenger if the message displeased the king. Today we are more subtle: displeasing messages get filtered out before they ever reach the ruler.
The Bay of Pigs, the decision to bomb North Vietnam, and now the Iranian adventure provide us with ample illustration of Groupthink. This magnificently Orwellian term was coined by psychologist Irving Janis to refer to a group's inability to tolerate dissent, to a situation in which getting agreement around a solution becomes more important than developing the best solution.
The decision by Secretary of State Cyrus Vance to resign following the rejection of his advice by President Carter indicates that Groupthink still dominates the top American and, no doubt, Canadian policy making bodies. President Carter, like Presidents Kennedy and Johnson before him, is learning the hard way that tough action must be taken in order to prevent the domination of the forces of Groupthink.
What does Groupthink look like? How would we recognize it in our own decision-making groups? Janis and earlier Norman Maier have identified a number of symptoms that we should be on guard against.
It is often difficult, because of the Groupthink phenomenon, forus to recognize when these symptoms occur in our own groups-- after all we know better, we would never make the same mistakes. That illustrates the first and greatest problem: the group believes that it is right; that it is right both factually and morally, and consequently the scenario of the operation (Bay of Pigs, Iran) will unfold as planned. This sense of invulnerability and moral correctness leads to four things that affect the group as it engages in the process of making a decision. First there exists a sense of unanimity within the group; everyone agrees on a plan. Indications of this are a failure to generate more than one or two alternative courses of action, and an individual's unwillingness to express his or her reservations -- individuals are their own self-censors. They suppress and keep to themselves their doubts and reservations about the plan. Often, many people share these reservations and the group lacks a true unanimity. In addition, members of the group put subtle pressure on those whose questions slip through the guard of their own self-censoring. As Janis observes they do this by limiting the bounds of criticism to details of the plan rather than to its underlying assumptions and by isolating the dissenter into a slightly ridiculous role as in Lyndon Johnson's term for Bill Moyers: "Let's hear what Mr-Stop-the-Bombing has to say". Finally and most injuriously the group develops the MindGuards. These are the people who filter the information coming to the group. They make sure that outside information is suppressed or reinterpreted if it fails to support the cherished assumptions of the group. As a result of this process, the group makes its decision only upon information that is supportive of that decision. This builds up a self-fulfilling cycle of correctness. The illusion of rightness and unanimity is preserved; no disruptive questioning or information is admitted by the group.
These processes are pervasive in decision-making groups. One of the few ways of reducing their severity is to institutionalise dissent. Janis and Maier prescribe several mechanisms for doing this. They represent a re-establishment of the traditional American system of checks and balances in the political process.
A group should routinely make decisions in a two stage process. First, critical evaluation should be suspended and a wide variety of alternative courses of action generated; the final list should consist of the off-beat as well as the obvious. This can be done by having several subgroups or individuals brainstorm lists of alternatives which are then brought back to the policy making group. In addition, group members should be encouraged to discuss the issues with their fellow workers and subordinates so as to bring a wider range of alternatives to the group's attention.
Second, each alternative should be criticized in terms of its strengths and weaknesses, with equal time given to both aspects. Work should be done on integrating several flawed solutions into a better one. This can be done by the leader of the group formally assigning the responsibilities of criticizing the alternatives to each group member. This alone is not enough; the leader must accept with good grace and an open mind the criticisms made about his ideas and proposals. Without this, all criticism will degenerate to a few pro forma comments. It is also helpful to augment the group, from time to time, with outside members who can bring a wider range of criticisms to bear upon the alternatives under consideration. These criticisms are apt to be less inhibited that those of the group members as they will have not built up any ownership of the alternatives under discussion.
Finally, when the group is close to reaching a decision about the best alternative, the leader should appoint a Devil's Advocate for the two or three options that are under serious consideration. These individuals are to challenge the assumptions and expectations of the proponents of each alternative. At the last step -- once a decision has been taken -- the group should meet one more time to review doubts and challenge the correctness of the decision. We have all experienced what the French call "the bottom of the stairs" feeling when one remembers that critical comment that might have changed the course of a discussion. This 'last chance' meeting gives us the opportunity to make that comment. It is like those Viking chiefs who used to make their decisions twice over: once when drunk and once when sober. If the two agreed they would carry out the decision; if they differed they would think again.
These practices will not completely eliminate errors of judgement, nor will they guarantee success as even the best laid plans may go awry. These procedures will minimize the chance of failure due to overlooking possible alternatives or failing to consider the potential side-effects of the outcome selected. We should salute Secretary Vance who has shown his ability to resist Groupthink and encourage his successor to continue to fight for alternatives within the policy-making group.

walking a fine line

Published: Globe & Mail, Toronto

Walking a thin line is one thing, but this was ridiculous
by
Griffith Evans
It all began the day I received my 1980 Property Tax Assessment from the City of Toronto. Gone was the old multi-stubbed computer card; in its place was a large pale blue sheet with a single receipt stub. These sheets are mailed out monthly. As I was paying my first monthly instalment, my eye taught a glaring error in the description of my small city lot. In transferring between the two computer systems, someone or some machine, had goofed. My lot size was listed as 00.2500 ft by 0000.000 ft -- an impressive set of zeros to the third decimal place. I wondered. if I had always lived in this limbo? No, a quick check of previous tax assessments confirmed that my lot was listed as 131.500 ft. deep.
My first thoughts were of the benefits of my situation: I could appeal my assessment and surely gain a reduction. After all, $700 in an exorbitant sum to pay for occupying no square feet. Then the disadvantages overwhelmed me. According to the records, 1 owned nothing I lived (with a wife, two children, and a large number of mortgages on a thin line -- mathematically a line is defined as having no width -- 25 feet long. That to say the least, was a precarious existence. Balancing all of us, to say nothing of the extensive library that threatens to overflow every room in the house, on this knife-edge is most uncomfortable, as well as damaging to our posteriors and to the bindings of the books.
The problem was of course, confounded by the question of who now owned our property. Did our back fence neighbours own our house, garden, library and all? If they found out about our situation would they march in waving their assessment notice, saying that their lot measures 25 ft. by 263 ft., and serve us with a 30-day eviction notice? Worse did no one own the property? Would armies of squatters, displaced from their homes by the recent wave of mortgage foreclosures, move into the unowned property? Would they settle it: a group in the garage, tents on the lawns, groups in the bedrooms, dining room, basement, and attic?
How the visions of overcrowding appalled me. How the visions of encroachment on our 25 ft. line scared me. We might be crowded off it on to the city property, the road, and end up being grist for the nether grindstone of the City saying "No further" and the upper millstone of the population on the unowned property saying, in no uncertain terms, "Move over."
More fearsome thoughts crowded my imagination. We had just spent a long and messy six months having an addition put on the house -- an 8-foot bite off of the missing 131.5 feet. Despite the warnings of friends experienced in the ways of construction and contractors I am pleased to say that my wife and I are still talking to each other, the children and our relations with them suffered no lasting ill-effects, and, wonder of wonders. we still like our contractor and are pleased with the work he did. But I digress, the point is, can we keep the addition? It is on whose ground? Will we be compelled to raze it to the ground while the ownership question is sorted out? I do not think that relations with wife, children and contractor could survive another demolition/construction cycle. Better to abandon the property and join the squatters in the garage.
Of course, neither the benefits nor the costs of this debacle came to pass. A quick phone call to City Hall soon put matters right. As I write, a corrected Assessment Notice lies on my desk, but I will be keeping my eye on future ones.

Reporting on Separation

Published: Globe & Mail, Toronto.

Your support of the Federalist cause, which I share, is well known. The apposition of two headlines was too much: British papers applaud federalist win in vote; and French press shows pro-sovereignty bias (May 23). Surely what is sauce for the French goose is sauce for the British gander. Keep your opinions for the editorial pages.