Tuesday, April 12, 2005

Adscam and the economics of attention

I have long been a fan of the theory of the economics of attention. Economics is the social science concerned with how people allocate limited resources (supply) in a world of unlimited wants (demand), with or without the use of money. Likewise, attention is a scarce resource, and even it is surrounded in economic terminology. People often offer a penny for one's thoughts, our mothers tell us to "pay" attention in class, speakers often begin a speech in a rowdy room by asking if they can "have" it, whereas Marc Antony, in Shakespeare's play entitled Julius Caesar, asked his friends, Romans and countrymen to "lend" him their ears.

The main feature of the economics of attention is the concept of opportunity cost, which is the cost of not undertaking the alternative economic venture available at the time. For example, the money I spend on a laptop could go towards a vacation, so the opportunity cost of getting a laptop is the foregone opportunity of going on a vacation.

Understanding this concept has enabled me to think clearly about how the media can sometimes manipulate the perceptions of what is of importance. It also goes a long way in understanding smoke-and-mirrors politics, of which Paul Martin is a grand master.

Now, the blogosphere is raging over Adscam and Paul Martin's claims that his books are clean, and there's a lot of attentio beind paid to this subject. But what is the opportunity cost of paying attention to Adscam? Could there be other, more hefty topics worth discussing and investigating?

How about the U.N. Oil-for-food money-laundering scheme?

CBCwatch.ca has archived an important article concerning a Ms. LoiseFrechette's role in the U.N. Oil-for food scandal, and it seems that the tactics she deployed may have been learned from the Grand Master himself, PMPM.

"Four years into the seven-year Oil-for-Food program, with graft and mismanagement by then rampant, Frechette intervened directly by telephone to stop United Nations auditors from forwarding their investigations to the U.N. Security Council. This detail was buried on page 186 of the 219-page interim report Volcker’s Independent Inquiry Committee released Feb. 3.

This decision from within Annan’s office left only the Secretariat privy to the specifics of the waste, bungling and contractual breaches detailed by U.N. internal auditors in dozens of damning reports. The extent of what Annan’s office knew was not available either to the Security Council or the public until Congress finally forced the issue and the United Nations produced the reports in conjunction with a Volcker "briefing paper" in January."

Now, the reason why we pay so much attention to Adscam is because it has a more direct relationship to Canada than does the U.N.O.F.F. scandal. Adscam is more directly related to Canadian politics, which sells copy to the public better. However, let's not forget Canada's connection to this $110 billion boondoggle, Ms. Frechette.

From canadafreepress.com:

"After leaving her first post at the United Nations, Louise Fréchette returned to Canada serving from November 1994 to June 1995, under then Minister of Finance Paul Martin, as his Associate Deputy Minister. Paul Martin held Canada's Minister of Finance position from November 1993 until June 2002, becoming Canada's 21st Prime Minister on December 12, 2003. Together, in 1995, Martin and Fréchette worked on several issues including the Halifax G-7 Summit, and participated in the "Standing Committee on Foreign Affairs and International Trade." Inquiries to Prime Minister Martin's office were not answered as of press time.

Louise Fréchette joins the illustrious Canadian connection in the UN Oil-for-Food Program, where there is her former boss, Prime Minister Martin who replaced Prime Minister Jean Chretien. Jean Chretien’s daughter, France is married to Andre Desmarais, the son of Paul Desmarais. Desmarais is the chairman and Co-Chief Executive Officer of Canada's Power Corporation, and the largest shareholder and director of France's TotalFinalElf. TotalFinalElf was one of the largest benefactors of Oil-for-Food contracts. According to the Financial Post, "In 1974, Desmarais, Sr., made Martin president of Canada Steamship Lines and then in 1981, he made him spectacularly rich by selling the company to him and a partner for $180 million." As CFP previously reported, Canada, the seventh largest contributor to the United Nations, will not investigate the Oil-for-Food Program."

The economics of attention would have people ask themselves whether or not a thorough discussion of Power Corp.'s role in making Prime Ministers constitutes the opportunity cost of the Adscam scandal. The incestuous relationship between the Power Corp. cronies and the PMO over the last 30 years has not been at the forefront of Canadian politics as much as it could be - why is that? The one company who has made Prime Ministers out of rich, Quebec-affiliated lawyers for the past 30 years always turns up absent from the public eye when a scandal hits.

Here's how the smoke-and-mirrors seem to work:

Situation A: Huge, damning scandal exists, and it needs a cover-up.

Problem: Cover-ups draw attention to Situation A.

Situation B: Less damning scandal.

Solution: The problem is the solution. Cover up the minor scandal to draw attention to it and away from the larger one.

This might not be the case here, though, as the Adscam inquiry may bring the government down, but it shows how lesser scandals can be used to draw attention away from major scandals.

So does Power Corp. factor in here, and if so, how?

Stay tuned.