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.