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The Fraser facts, minus the spin: Alberta has a revenue problem, not a spending problem

Swiss Cheese

If the Fraser Institute told the whole truth, or if the mainstream media did its job, here's the what the first sentence of the Edmonton Journal's story about the institute's most recent "report" could have said:

"Alberta's finances are in better shape than other energy-producing provinces and states, says a report released Thursday by the Fraser Institute…"

Instead, the Journal, having been led successfully down the garden path by the Fraser Institute's undeniably skillful press-release writers, stated the opposite:

"Alberta's finances are in worse shape than other energy-producing provinces and states, says a report released Thursday by the Fraser Institute…"

How did the Fraser Institute transform good news (by its own ideological lights) into bad, thereby justifying its predictable demand for less government spending? Through the application of the methodology the "institute" always uses to bend facts to its never-changing conclusions.

I don't know if they’ve trademarked this approach, but they really ought to. Let's call it the "Fraser Forumula." ™

Because one thing you can say for the Vancouver-based market-fundamentalist propaganda shop -- it is no more an "institute" than a lawnmower repair shop is a "hospital" -- is that the facts contained in its reports are usually accurate.

Yes, you heard that right. The Fraser Institute doesn't make up facts. It just twists their meaning -- often with spectacular insouciance -- and then tells the media they mean whatever it feels like saying.

Fraser Facts are also properly footnoted, if you happen to bother to read the report and check the reasoning -- which the mainstream media rarely, if ever, does. Which is what justifies the insouciance, I guess.

So the Fraser Formula ™ works something like this:

1)    Cherry pick the facts you use as "evidence"

2)    If the evidence still won't show what you want it to, ignore it

3)    If necessary, state the opposite conclusion to what the evidence shows

Fraser Institute conclusions, of course, tend to stick close to the "holey trinity" of neoliberal economics: governments are spending too much money, taxes are too high, and too much regulation is imposed on corporations.

And so we see on page 35 of the latest report -- about midway through its 66 pages, a statistic the media never fails to omit, as if the number of pages gives a report's conclusions additional weight -- just how well Alberta is doing according to the measure of government spending relative to the other jurisdictions picked by the researchers.

Figure 15b tells the story quite nicely: Of the 10 jurisdictions cherry-picked by the Fraser Institute -- every one of them conveniently in North America, as previously noted -- Alberta’s average government expenditure to Gross Domestic Product ratio in the period examined is the third lowest.

Only Colorado and Texas spend less as a measure of GDP. Alberta is in a virtual statistical tie with Louisiana -- and that's with public health care up here in Canada!

Now, whether we ought to be spending even less than Louisiana is another matter entirely. The Fraser Institute obviously thinks so. Many of the readers of this blog may not. But the point is that, by the Fraser Institute's own lights, Alberta is doing better than seven of the nine jurisdictions the group claims are proper comparators for energy-rich states and provinces.

And, as the report's authors state, then blithely forget about: "this … measure is the most commonly used when gauging the size of government as it better captures the ability of a jurisdiction to finance government spending as well as indicating the broader impact of government spending."

Naturally, the Fraser Institute prefers a measure considered less meaningful by economists -- average per capita spending. But even by that measure, though, Alberta is not doing too badly -- better than three of the cherry picked jurisdictions (spending less than half as much as Alaska) and not significantly different four others. Again, Colorado and Texas are the low-spending outliers. (This is illustrated in Figure 15a, on the same page, by the way.)

So it's not the facts cited by the Fraser Institute that led the Journal and other media operations to the conclusion Alberta was doing worse than other (mostly Republican governed) jurisdictions, it was the press release … in other words, the spin.

Even here, the release writer couches his or her words carefully, so as not to be accused of misstating facts: "… When compared to other energy-producing provinces and states, Alberta loses its lustre." (Emphasis added.)

Never mind the statistics, there are enough holes in the Fraser Institute's sloppy interpretations of almost any issue to store captured carbon! But there's something almost admirable about the sheer chutzpah of it.

As the figures cited in the fine print by the Fraser Institute clearly show, our government spending is too low, not too high. In other words, as a few voices in the wilderness have been crying out for several years now, when it comes to the Deadly D-word -- Deficit -- Alberta has a revenue problem, not a spending problem.

Naturally, the conclusion reached by the Fraser Institute, and echoed by the press, is the opposite: "Increased government spending -- not a dearth of revenues -- has saddled Alberta with budget deficits…"

There's even more in this piece of work, but 800 words is enough for one night. Perhaps we’ll return to this report one more time and talk about what the Fraser Institute has to say about North Dakota -- unless, of course, they issue another deceptive press release first.

This post also appears on David Climenhaga's blog, Alberta Diary.

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