Canada and the UAE

A much-debated editorial article in Gulf News, a publication from the UAE has provided me much amusement this New Years Eve. It seems that when they decided to run the article the preparers decided to try to cram as much criticism of Harper and his government (relevant or not) into as few paragraphs as possible. The blatant errors and hypocrisy amused me.Harper would have to have invented a time

MP Bob Sopuck: Right Wing Scientist?

The Toronto Star has an interesting article on Bob Sopuck, the new Conservative MP from Manitoba. I strongly recommend the article as it seems to give an unbiased look at his environmental credentials and background.What caught my eye however, was the fact that he attended and graduated from Cornell University. That name may not be as familiar to you as Harvard or Yale, but it is an Ivy League

Confused on Potash

Another win for the cement-heads. The whole farrago about strategic resources, net benefit to Canada, head office jobs, the hollowing out of this great country and all the other economic nationalist mumbo-jumbo – swallowed whole by the not-so-Conservative senior management. Potash is off. It’s in the national interest. Well, yes, the shareholders may have had their rights “restricted” (one might wonder what it means to be a shareholder at all if you’re not allowed to sell your shares, but that’s just the kind of debating trick that free-market fundamentalists like to spring on the unsuspecting).

For an example (conveniently close to hand) of what passes for middle-of-the-road thinking on this issue, here are Adam Daifallah and Dov Zigler in the Post (Nov 6):

First of all, regardless of who “owns” Potash Corp.’s shares, most of its earnings are kept in Potash Corp. and reinvested in Saskatchewan. During the first six months of 2010, Potash Corp. retained earnings of CDN$862.9-million but only paid a dividend of CDN$59.3-million. These earnings stay in Potash Corp. and aren’t sent to the shareholders.

If a global firm were to buy Potash Corp., that earnings stream would get retained somewhere other than in Canada. Essentially, the BHP Billiton buyout would have paid off Potash Corp.’s international shareholder base to stop retaining Potash Corp.’s earnings in its largely Canadian potash activities. Instead, the cash flow would have accrued to BHP and largely been reinvested in BHP’s global mining plans.

Of course, that is the whole purpose of investment: for investors to reap the profits. And if they are foreigners, then, yes, the profits go out of the country. If this is objectionable why allow foreigners to invest in Canada all? Why do we allow Starbucks to sell coffee and Apple iPhones when these earnings streams are flowing out of the country? Shouldn’t we just make everybody buy from Tim Horton’s and RIM and keep all that money in our local communities?

For some reason foreigners, rapacious and, well, foreign, as they may be, don’t share these attitudes. Fortunately for us. So, for example, a couple of Canadian pension funds just acquired a high-speed rail link in the UK (actually the only high-speed rail link; but don’t laugh - we don’t have any). Presumably, the point is to export the profit stream back to Canada for the benefit of their retirees. Following the logic of economic nationalists, this should not be allowed.

Ironically, Canada is a direct beneficiary of open investment: it owns more of the rest of the world than the rest of the world owns of Canada. Yet here we are at a time of rising protectionist sentiment and looming competitive devaluations, gumming up the works with investment regulations that do nothing except cater to local superstitions (in addition to the great work we are doing at the WTO with the defence of dairy quotas).

Whatever his other qualities, though, the PM can still do the political math. The choice was to risk some (or possibly all) of the 13 Tory seats Saskatchewan or losing the support of fiscal conservatives. Since there are no fiscal conservatives in Canada this is pretty much a no-brainer.

The full cost of sick days

You have to wonder how much of Rob Ford’s winning margin was directly due to the garbage strike last summer. If there is a backlash feel to this result it is not unusual. The right often wins after a period of serious misgovernance and waste from the left or centre-left. A few notable examples (from major to minor): Jimmy Carter followed by Ronald Reagan, James Callaghan followed by Margaret Thatcher, Bob Rae followed by Mike Harris, and now David Miller followed by Rob Ford. Maybe the lesson is that while it is all very well and good to be right wing the deciding factor is the temperature of the middle-of-the-road electorate. When they get ticked off heads roll.

Hopefully the unions will soon start to feel the heat. Dalton can’t be feeling too happy about this either.

Vote Ford

The shortest and simplest reason to vote for the big guy comes from a final comparison of the Toronto mayoralty candidates in Saturday’s National Post (not available online). The bottom of the page lists the endorsements for each candidate: CUPE, CAW etc for Pantalone; Carpenter’s Union, Central Ontario Building Trades, etc for Smitherman.

For Ford: no union support.

A non-union mayor in this city is way overdue. Time for a change.

Getting it wrong with the Globe and Mail

Quality and standards are what differentiate professional journalism, as practiced in our dwindling newspapers for instance, from the blogosphere, written by and for the mob. Or so we’re told. The following is from the Saturday Globe and Mail – the Editorial and Comment page, no less.

First, from “The incredible shrinking work force” by Doug Saunders (quoting author Ted Fishman):

“Given China’s age structure today,” Mr. Fishman writes, “it is in the midst of a retirement avalanche … today, for every 10 working Chinese there are two elderly dependants, but by 2050, there will be six elderly dependants for every worker.”

Really? SIX old people for every worker. Is that a demographic forecast or the scenario for the next sequel to Resident Evil?

Further down on the same page is Jeffrey Simpson waxing on about how people aren’t paying enough attention to what global warming is doing to the Arctic:

The effects of warming are not exactly under the noses of most Canadians, because they are most dramatic in the Arctic, where few Canadians venture. The Arctic is too remote, forbidding and foreign for most Canadians to think much about. It’s out of sight and out of mind, a bit like the whole issue for the government.

Good thing we have a pro on the case:

As the permafrost warms, chances increase that pools of carbon previously trapped in the frozen permafrost will be released.

Note the MSM quality style: “permafrost” repeated in the same sentence (and it’s frozen, by the way). And the “pools of carbon” are not literally pools, in case anyone got that impression.

Elsewhere:

. . . more water instead of ice means more reflected sunlight, which, in turn, contributes to warming . . .

Actually more water instead of ice means less reflected sunlight. More sunlight is absorbed by the water, which gets warmer, melting more ice, and so on.

The third column on the page, Margaret Wente’s reflections on the limits of medical knowledge, was well-written and howler-free. In fact, you could call it professional.

Bell Customer Service

It was reported on CBC radio yesterday morning that the relatives of one of Russell Williams' victims had to speak to 5 different agents at Bell Canada to cancel her cell phone contract - having to explain the situation again each time - and that the process took an hour and a half.

Well, pretty much what you'd expect from Bell.

(This was apparently detailed in one of the victim impact statements. It does not appear to have gotten much play in the MSM. But at least one other person reports having heard the same thing here).

Facts and the Long Gun Registry

The Chronicle Herald recently published an article that purports to state a number of 'facts' concerning the long gun registry. At least, I'm assuming that was their intent, because the title is "Harper's (long-gun registry) index" and it would make no sense if they were stating fallacies. My problem with it? They're not all true, some are half-truths and of those that are true, some are

Transit for the Rich

Subway construction is finally coming to the fore in Toronto civic politics, after decades of being unmentionable in polite company. Mayoral candidates have finally come round to the obvious – that they are indispensible for a city of this size and that the Miller-Metrolinx light rail plan is not up to scratch. What has yet to seep into public awareness is how we got here in the first place. In a nutshell, this is because transit is basically social assistance on wheels, whereas the key to successful transit is catering to the well-to-do.

In a recent column the New York Times’ Thomas Friedman mentioned taking the bullet train from Beijing to Tianjin on his last visit to China: 75 miles in 25 minutes. Yes, China does have traffic issues (and democracy issues for that matter). But they are on to something here and that is that transit ought to hit a high standard: clean, efficient and above all fast. Something that appeals to everyone – including busy people whose time is expensive.

The North American model for public transit, on the other hand, is a kind of consolation service for people who can’t afford a car. The resulting vicious cycle is as predictable as it is hard to get out of: slow, crappy buses, with surly drivers make for a service nobody wants to use, except people who don’t have any alternative; this makes for a small and ineffective constituency for transit, which makes raising funding politically hopeless, which makes it impossible to do anything more than do anything more than tinker with bus routes and sucky light rail.

The slowly dawning realization that Toronto is going to choke on its own surface vehicle congestion is at least a start. But the problem won’t be comprehensively addressed until its politics are fully understood: Public transit has to reach a standard which appeals to everybody. In particular to people who need to be somewhere fast. When it reaches this standard it will win the constituency which allows the funding it needs. Otherwise it will remain a welfare service with welfare standards and welfare funding.

Government Energy Subsidies: Poor Paying the Rich

If you've read my blog more than once or twice, you'll know that I oppose wind and solar power subsidies based on the fact that they do not generate electricity consistently or cheaply enough to be considered an 'alternative' energy source. Moreover, I do not believe that increasing the amount of electricity generated from wind farms will significantly reduce carbon dioxide emissions since the

Wind Power's Problems Not PR

If you read the Toronto Star recently, you might think that wind power's only problem is unreasonable health concerns, and a minor case of NIMBY.I'm still undecided about the health effects of wind power, to be honest. I can't see any reason why they might cause health problems, but I'm not willing to dismiss the idea out of hand without any widespread implementation and observation. I'm pretty

Ignatieff and Wedge Politics

People often criticize Harper for excessive partisanship, and while that may be true, I'm unwilling to accept that as a criticism from Liberals and Ignatieff supporters. Principally because the Liberals have attempted to turn every issue into an attack on Harper in one way or another.His criticism of Harper and the nuclear industry illustrate this more clearly than most:Michael Ignatieff says

Kay on denialism

Jonathan Kay in the National Post on conservatives and climate change. That climate denialism is not only wrong but a liability to the conservative movement is something that needs to be said more often (especially in the Post with its strong and mistaken biases on this subject).

Kay on the myth of growing skepticism about global warning within the research community:

The group that is skeptical of the evidence of man-made global warming “comprises only 2% of the top 50 climate researchers as ranked by expertise (number of climate publications), 3% of researchers in the top 100, and 2.5% of the top 200, excluding researchers present in both groups … This result closely agrees with expert surveys, indicating that [about] 97% of self-identified actively publishing climate scientists agree with the tenets of [man-made global warming].”

Furthermore:

Conservatives often pride themselves on their hard-headed approach to public-policy — in contradistinction to liberals, who generally are typecast as fuzzy-headed utopians. Yet when it comes to climate change, many conservatives I know will assign credibility to any stray piece of junk science that lands in their inbox … so long as it happens to support their own desired conclusion. (One conservative columnist I know formed her skeptical views on global warming based on testimonials she heard from novelist Michael Crichton.) The result is farcical: Impressionable conservatives who lack the numeracy skills to perform long division or balance their checkbooks feel entitled to spew elaborate proofs purporting to demonstrate how global warming is in fact caused by sunspots or flatulent farm animals.

Kay wraps up:

Rants and slogans may help conservatives deal with the emotional problem of cognitive dissonance. But they aren’t the building blocks of a serious ideological movement. And the impulse toward denialism must be fought if conservatism is to prosper in a century when environmental issues will assume an ever greater profile on this increasingly hot, parched, crowded planet. Otherwise, the movement will come to be defined — and discredited — by its noisiest cranks and conspiracists.

Well said.

Monthly Wind Report - June, 2010

Looking at electricity generation from windfarms in Ontario from last month reveals some interesting details. As always, the data that I am using is publicly available on the IESO website.Figure 1: Wind generation for Ontario in June, 2010 - Datapoints are hourly.As I've come to expect, sometimes the windfarms produce large amounts of electricity and sometimes they produce nearly nothing. The

G20. So sorry you're gone.

The end of the G8/G20 clustersummit may be a good time for a little overview of the record of the Harper Party. Some critics have whined that they’re too cheap to fund community events. Clearly wrong. They backed Police Pride Week to the hilt; in fact it probably couldn’t have been held without the very generous level of federal funding it received. And it isn’t true that Conservatives are indifferent to the arts. They obviously love Security Theatre. Which, for anyone who hasn’t seen it, really is a spectacle: the packs of cops on bikes, the dozens detailed to guard street corners and the columns of fully equipped riot police would impress anybody. It’s just too bad that the view was reserved for Torontonians only and that this couldn’t have been done in every city and town in this great country. But maybe one day it will.

Some people say that the Tories hate Toronto. But then why would they attract world leaders here, to show them the Harbour Castle Westin and our wonderful Convention Centre, as well as to put on such a great show for all the local folks? Who loved it by the way; they were out with their cell phone cameras recording every minute. And this for a community which never votes Tory. So much for the canard that the Conservatives are a partisan mob who only reward their supporters.

Now there are those who say that these summits don’t accomplish anything, but this also misses the mark. The G20 accomplished a lot: it addressed our smog problem by shutting down the city for the better part of a week, it made people get out and get some exercise by closing the transit system on Saturday, it gave them a chance to save instead of foolishly running up more credit card debt in bars and restaurants, and it implemented a “shovel-ready” stimulus package for local glaziers. AND . . . And it produced a final communique urging all member nations to stabilize their debt-to-GDP by 2016, just 6 short years from now. Which they absolutely will do. Unless they don’t.

And so on to South Korea, the next victim … er, deserving recipient of this great honour, where in just 6 months the leaders will be able to revise the definitive long-term course they just agreed to. Wonderful. (And as a final tip, there’s a view that Korean riot police play pretty hard, so some of the Black Bloc might want to give a thought to not reboarding at the rest stop in Hawaii and maybe spending the weekend surfing instead. . .)

Electricity Without Subsidies?

Increasingly, the question must be asked whether or not electricity generation can occur without direct or indirect government subsidies and loans. If the answer is no, then to what extent should the government be involved in the process and should it be allowed to 'play favourites' when it comes to supporting groups pursuing electricity generation.There needs to be a clear difference made

Australian PM Steps Down

Kim Campell, err... I mean Julia Gillard has been appointed Prime Minister after Brian Mulron... I mean, Kevin Rudd stepped down. The reason seems to surround the climate change policies that Rudd advocated, and then back-tracked on, but as all things, is likely a combination of a large number of things. In any case, it will be interesting to see if Gillard's term is short lived.

Helium-3 Supplies Running Low

Who cares?Most people reading the title probably thought exactly that.Helium? And what's that three mean? And so what if we're running out of it? Bear with me and I'll try to change your mind.Helium-3 is an uncommon isotope of Helium that has two protons and a single neutron. It occurs naturally and can be produced through the beta decay of tritium, an isotope of hydrogen with three protons.

Iron fist

Downtown Toronto is now cop heaven. Twenty five of them standing on the not very wide northwest corner of Wellington and Bay at 9 p.m. With reinforcements at the ready on the southwest corner in case anything happens. Cops in cars, on foot, packs of them on bikes and down at Harbourfront a couple of behelmed security doughboys rolling at a sedate 3 mph on their ATVs, looking like RoboCop meets LawnBoy. Security fences around hotels and running the length of blocks around the bank towers. This is presumably what the Gaza Strip looks like, with the difference that this nonsense is all sanctioned and not censured, by the international community.

Anyone who doesn’t feel at least a twinge of distaste at the sight of a security perimeter is probably not a democrat at heart. It might be an overstatement to call law enforcement a necessary evil, but it’s at least a necessary something-not-so-good. Which means unnecessary security is objectionable. And that is exactly what the G20 lockdown is. It’s the state flexing its metallic muscles to no purpose whatever, except possibly to provoke the leftist rabble. If the lefties do get wound up at the sight of this steroidal display, well, it’s hard to blame them. In fact, maybe it's time for a libertarian wing of the International Order of Street Chaotists; they could have a black flag with Milton Friedman in silhouette.

And the cost. $1 billion for this celebration of the coercive power of the state. Add in the economic loss from shutting down the core of Canada’s biggest city for a week (offset by the positive value of a G20 gabfest, that is, zero). The Harper government levered itself into power in 2006 in part on account of the Sponsorship Scandal, which involved about the loss of $100m of public money; the summit is wasting more than this by an order of magnitude.

Canada should never hold an event like this again. Even better would be to stop attending them and just drop out of the G8 and G20. It wouldn’t make a damn bit of difference to anyone, except for Harper and Flaherty not getting their picture taken with a bunch of other organization men and that the hapless Canadian taxpayer would save a few bucks.

The Art of Deflection

So, Obama is seeking some big deal on alternative energies as a result of the oil spill in the Gulf of Mexico. Trying to link the two issues is akin to proposing to repair the roof when your basement is flooding. Sure, maybe your roof needs fixing, but shouldn't one focus on the leak in your basement?The US' problem is that their oil dependence is forcing them to ally with less than reliable

Media Goes Nuclear

One thing that never ceases to amaze me is the endless fear mongering about nuclear power plants. In some sense, its understandable that in the aftermath of the oil spill disaster in the gulf, people are more and more skeptical of safety claims of so-called 'experts' and people who work for certain industries.But sometimes, the media blows minor issues far out of proportion.Reading the Japanese

The Real Costs of Electricity Rates

If your electricity rates were to double, the effect it would have on your monthly bills wouldn't mean more than a few hundred dollars a year most likely. To be sure, that might crush those living beneath the poverty line and those living paycheque to paycheque, but for the middle and upper class, just a mild inconvenience. But rising electricity rates don't just affect your monthly electricity

Never Trust the New York Times

By amusing coincidence, I happened to be reviewing the recent Czech legislative election results which will in all likelihood lead to a centre-right coalition taking power with a decrease seen by all the parties of the left; Green, Communist and Social Democratic PartyAnd then I happened on an article in the New York Times talking about the increasing power of the Communist party in the Czech

Canadians Didn't Buy the H1N1 Hype

A recent report shows that even in Toronto, Canadians generally didn't buy the H1N1 hype, and wisely chose to ignore the hysteria and go about their normal lives. I've always felt that the H1N1 hysteria was overblown and that people who bought into it were worrying themselves sick over nothing. I can recall the media breathlessly reporting that this could be the Black Plague of our times.

Brain Drain to Canada?

Wait! Stop! No!This doesn't fit our neat narrative of the Harper government hating science!

On the Future of NASA

Just wanted to point out a few things about Obama's plans for NASA. Compare the following two statements.Obama noted that the Constellation Program, which had sought to send astronauts back to the moon by 2020, is behind schedule, over budget and overall less important than other space investments.And"By the mid-2030s I believe we can send people to orbit Mars and bring them safely back to

Obama Snubs and is Snubbed

The big nuclear summit ended with a fizzle. No major announcements, no big agreements. Just a token consensus to secure 'vulnerable' nuclear supplies. Because those dangerous stockpiles in Canada are the real threat to nuclear security, eh.Meanwhile, Japan-USA relations reached a new low as Obama refused to squeeze Hatoyama in for more than a chat during the summit, and so in return Hatoyama

Obama's Major Foreign Policy Victory

Yes, you read that title right, a major threat to international nuclear safety has been eliminated thanks to the Obama administration. The Canadian government, widely known to be a prime proliferator of nuclear weaponry has, under great pressure from Obama, broken down and agreed to transfer its stockpile of highly enriched uranium to the USA.What's that you say? It was being used to produce

Earth Hour: An Exercise in Futility?

According to the IESO website, 560 MWh of electricity use was avoided as a result of Earth Hour and I'm going to tentatively accept that figure for the sake of argument. The real question I want answered is how much carbon dioxide was really avoided with this exercise.The way not to answer this question is by taking a chart of total capacities and dividing the 'savings' out among all the

Weekly Wind Report

So the last week was an interesting one as far as wind power was concerned. Like a roller coaster, the amount of electricity produced by the wind farms increased and decreased before increasing again and decreasing again.It didn't get as low as we've seen it before, but it didn't get as high either.Capacity factor: 27.80%Maximum Output: 808 MWMinimum Output: 27 MWBiggest change hour-to-hour:

Earth Hour: Why I Won't Be Participating

Earth Hour is coming, tonight in fact. An hour where millions of Canadians will shut off their lights and celebrate how environmentally conscious they are. I won't be one of them.Earth Hour in Ontario isn't about conservation. Shutting off the lights in your home one hour a day is not going to have any long term effect on the environment, as your 40Weq fluorescent light bulb is not the

Weekly Wind Report

First the good news for wind advocates, this week, wind power broke 40% capacity factor for the first time since I began tracking it.Bad news, wind power fluctuated wildly across the week, rising as high as 922 MW and sinking as low as 5 MW. If we were only using electricity when the wind blows this wouldn't be a problem, or if we had another way of 'smoothing' out wind power across a week. But

McGuinty Raises Your Bills (again)

McGuinty certainly has found a way to raise more money for his spending sprees. Rather than raising the PST.. err.. HST or raises income taxes, he's going to raise your electricity bills. And because that money is not going directly to the provincial government, he hopes to confuse Ontarians into believing that its those nasty electricity companies, and not his government which is taking more and

Illinois Opens Up

In a nearly unanimous vote, the Illinois Senate has opened the path for the construction of nuclear power plants in that state.That doesn't mean they'll start building nuclear plants, but removing an arbitrary ban on nuclear power based on groundless fearmongering in the wake of Chernobyl is a good first step.

More Windmills Won't Solve This Problem

I've been thinking increasingly about the problem of intermittent power from wind mills. Partly because I've been visiting the Spanish electricity website where they indicate a relatively more stable supply of electricity from wind power. Which made me wonder if having more wind power somehow causes the output on average to be more stable. It probably would if you had multiple independent

Electricity Too Expensive? Blame McGuinty

Seems like someone has found out that their rates have increased recently and that all that effort they put into trying to 'game' the system has not brought the savings they wanted.Now, I understand why she is upset. She was told that if she did as the government wanted that she would save money, now she is realizing that despite doing exactly what the government wanted, her rates have increased

Weekly Wind Report

So, I have one question for wind advocates. In Ontario, with a total installed 'theoretical' capacity of 1085 MW, for a one hour period, you couldn't scrap together more than 2 MW of output. That's pathetic.A nuclear reactor or a coal fired power plant may shut off for repairs but its generally predictable when it will occur and for how long. When they are operating, they can operate

Some Budget Critics Can't Get Their Stories Straight

Thump.You hear that sound? That's the sound of someone's writing style hitting rock bottom.Perhaps I'm being harsh though, I disagree completely with his point of view. But that's not unusual, you have to deal with people everyday who you don't agree with. What I can't stand, however, is when someone's logic is internally inconsistent.For example, he attacks the budget for giving money to AECL to

Science Policy and the Conservative Budget: Part I

One thing that should never be rushed, is political analysis of science policy. Better to delay judgment and make a good policy than to rush into a bad decision without thinking.Some highlights from the budget that I like include:Funding CouncilsConsidering that around the world, government agencies are strongly pushing to reduce science budgets [1,2], I think the fact that Harper isn't going to

Weekly Wind Power Report

So this week is probably exactly the nightmare that I keep referring to for wind power. The overall capacity factor was up slightly from last week but only because of a large peak that occurred between the second and third days.The power output went from almost nothing to over 900 MW in the period of a day and then dropped rapidly back down under 200 MW. Then it bounced back up and down for a

Coal, China and the Crazies

And by crazies, I mean, anyone who would dare to praise the Chinese government for being 'ahead' in the 'clean energy race'.Look at the facts for goodness sake, China produces 90% of their electricity from coal and oil. A meagre 0.06% comes from 'other' sources like windpower.

Weekly Wind Report

If there's one thing I don't mind, its facts. I've been open about my position on wind power and its usefulness (or lack thereof) in generating electricity for Ontario. So I don't mind looking and publicizing facts about wind power.So in that trend, I'll be posting data taken from the IESO public reports concerning wind generation in Ontario every weekend.For the week of February 16 - 23, there

McGuinty Ignores Facts, Pushes Ahead

This is a very good article concerning green power and their potential in Ontario. I would just like to highlight one very important quote.In a report two years ago, the Ontario Power Authority (OPA) told the government that "wind and solar power will never be more than a niche supplier of power in Ontario."People in the system know that wind and solar power is a dead end for Ontario. People in

Getting it Wrong with Michael Bliss

Eat the rich. Well, tax them to death (and then confiscate their estates). That’s the plan according to Michael Bliss, one of Canada’s leading historians (and, thankfully, not one of Canada’s leading public policy experts). The rich are just sitting on piles of money, which the State needs – currently for deficit reduction in particular and for the Entitlement Project in general. They are earning more than ever and are taxed less heavily than in the 1950s, fueling social resentment. Bliss’ solutions are a bit of a dog's breakfast (death duties, progressive taxation (90% on incomes over $2 million) and publishing the tax returns of everyone in the top brackets); but his heart is in the right redistributionist place and that’s what matters. Also, he is opposed to raising the GST back to its former levels. Sales tax is not progressive enough, since ordinary people have to chip in too.

This is all completely wrong. First and most blindingly obvious is that if the rich get squeezed they’ll just leave. They’re exactly the kind – probably the only kind – of immigrant that every country wants; and mobility not just of capital, but even of people, has never in history been greater. This is why the supertaxes of previous decades had to be abandoned.

A second and more serious point Bliss overlooks is that the expenditure problems of developed economies are not in an acute state of crisis but a chronic one. It’s not as if we need a one-time top-up in funding and then everything will be fine. Rather, we are going to have a squeeze this year, next year, 10 years from now, 75 years from now. Demand for public funds is limitless and always will be. Taxing the rich is exactly the wrong quick fix because it gives the non-wealthy majority relief without making them take responsibility for their own choices. If its ok to do this time, it will be next time too. Deficit? Surcharge. Health care overruns? Surcharge. Infrastructure collapsing ahead of schedule? Surcharge.

While it's ok to cut the poor some slack with regard to public finance, as they have enough problems already, it is totally wrong to do this with the broad middle class. People ought to look their choices in the face. Which is why the next tax hike – and the one after that – should be the GST. A little reminder for everybody, every day that stuff costs money.

Bliss fulminates against the wealthy leaving their children their estates. “Unearned wealth,” supposedly. Is it any less unearned if confiscated by the State on behalf of voters who don’t want to take responsibility for their spending choices?

The Demand Economy

Stop the downsizing. So Newsweek – now transformed into a weekly collection of op-ed pieces, presumably the last phase of its life-cycle before extinction. The item, by Jeffrey Pfeffer is not much to read; the argument is that downsizing doesn’t do much for the bottom line. But this is most likely because companies that downsize are already seriously sick anyway. Then there is the effect on the wider economy:

Beyond the companies where layoffs take place, widespread downsizing can have a big impact on the economy—a phenomenon that John Maynard Keynes taught us about decades ago, but one that's almost certainly going on now. The people who lose jobs also lose incomes, so they spend less. Even workers who don't lose their jobs but are simply fearful of layoffs are likely to cut back on spending too. With less aggregate demand in the economy, sales fall. With smaller sales, companies lay off more people, and the cycle continues. That's why places where it is harder to shed workers—such as (can I dare say it?) France—have held up comparatively better during the global economic meltdown. Workers there are confident that they'll remain employed, so they needn't pull back on spending so dramatically.

This is pretty much the mainstream line on unemployment, which is interesting mostly for what it doesn’t say. Its not the loss of productive capacity that counts, something most economists and journalists barely mention. In fact, as anyone who has been to any kind of retail outlet at all in the last year can attest, there’s still lots of stuff. Cars, cameras, groceries, whatever – we’re not missing anything.

Except buyers. The essence of the recession is that people aren’t out there buying stuff. The unemployed in particular. Which implies that their real economic function is not to produce goods and services – the loss of their productive contribution isn’t missed by anyone. It’s to shop.

The reality of modern economies is that there are a heck of a lot of people not doing anything – and not just students, seniors and the un- and underemployed, official or otherwise. There are a lot of people actually in the labour force – notably in public sector unions and corporate bureaucracies, but in lots of other places too – who are taking a paycheck but not actually producing anything of economic value.

But that doesn’t mean they’re useless. They buy stuff. The Keynesian reality, Alice-in-Wonderland as it is, is that given the efficient core system of production which all developed economies have (and places like Haiti or Ethiopia don’t), you have to have shoppers to absorb the output. Otherwise the system grinds to a halt. In this context, massive labour market inefficiencies – which all developed economies also have – don’t matter. People can slack off as much as they like. Just as long as they don’t slack off at the mall. That’s when you get into real trouble.

Getting it Wrong with Krugman

Paul Krugman’s latest in the New York Times is that the euro was a blunder. Focusing on the problems in Spain (conceding that the Greek crisis really was, at least in part, caused by government profligacy) Krugman writes that

The . . . core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation.

Stiffing those foreign creditors who were foolish enough to lend in pesetas, of course. But hey, they’re wealthy bankers. Of course, the obvious problem with this “painless” solution is that the peseta might not go down 20 percent. It might get dumped in a wave of panic selling and go down 90 percent. Along with the drachma and the lev and the forint and all the other folk-dance coinage from the European fringe.

Spain and Greece would then have to pay for imports – including stuff like oil, which they kind of need and kind of don’t produce – in dollars or Deutsche Marks, thereby throwing their own economies into an oil-shock recession while running down their foreign currency reserves. Which means that sooner or later (guess which) they would run into trouble paying back those foreign lenders who were foolish enough to lend in real money.

This would then spread the contagion – like the Asian currency upset and Russian defaults in 1998 which wiped out Long-Term Capital and almost transmitted the crisis to the US. Tottery banks would see more of their assets – loans to peripheral Europe – impaired or wiped out. No, there’s nothing wrong with a lot of itty-bitty currencies and lots of cross-border lending. Except international speculators trying to screw everything up. Doubtless the Krugster would be all over them.

Useful Quotes to Remember

Next time you are in a debate with a climate change activist and use a non-peer reviewed source of information, if they protest angrily that only peer reviewed material should be acceptable, give them this quote.He said many of the criticisms were based on a mistaken belief that the IPCC could not use so-called grey literature – reports from outside academic journals such as from campaign groups

Our crap-ass justice system

Everybody’s watching the Olympics. Well, not Jane Creba. Actually, since she was shot in 2005, she missed the last Olympics – the twentieth winter games, held in Turin in February of 2006. The resultant legal proceedings, on the other hand, seem to have a life of their own. One of the trials is still running, more than 4 years after the alleged fatal shooting. How is it that it takes longer than an Olympic cycle, or a presidential term, to wrap up a murder case?

Another example: John O’Keefe was out walking on Yonge St in the early morning of January 12, 2008 when he was fatally shot by a stranger. The alleged perp was apprehended within hours, but the trial is only starting now, two years later. In April 2006, 8 members of the Bandidos motorcycle club were murdered near London, Ontario by their associates. The trials concluded in October, 2009 – 3 ½ years later. But then, this is from the same justice system that could only charge mass-murderer Robert Pickton with 6 counts of murder even though there was evidence for 26 (and the real toll was probably closer to double that) because the system just couldn’t process that much information and it was feared that a full trial would collapse. In the event, time from arrest to conviction was almost 6 years.

On the other hand, if anybody actually cared about this it would be a public issue. The legal establishment seems fine with this length of proceedings and the public doesn’t even notice. Back to short-track speed skating . . .

It's the law

Unless you just don't care. CBC reports on suspended drivers leaving the courthouse . . . in their cars. Apparently there are over 250,000 suspended drivers in Ontario. According to MADD (Mothers Against Drunk Driving) about 75% of them are driving anyway.

And why not? There's too many to lock up. And besides, it wouldn't be the Canadian way. Certainly an object lesson for those, like Mohawks and polygamists, who are on a collision course with the law as currently constituted. If you dig in your heels, you'll probably win. It's surprising that dope smokers haven't picked up on this and started smoking flagrantly in public; well, more flagrantly. Maybe they're a little zoned out. One or two mass toke-athons this summer would probably be enough to break the back of criminalization, if anybody could be bothered to organize them.

But on the other hand Canadians are naturally so law-abiding that maybe the absence of enforcement doesn't really matter. As long as the ranks of the obstreporous don't swell too quickly we'll probably be ok.

Modern Art

Barbara Kay in the Post:

Conceptual art, whose roots go back to the 1960s, privileges ironic statement and self-reflexive cleverness over talent and discipline.

And about time, too.