My Conservative Dreamworld

Sex, parking, football.

2011-11-12T23:49:00.003-05:00

A great line from Margaret Wente's column on college football as the true religion of the US, quoting former University of California president Clark Kerr: the formula for a successful university is sex for the students, parking for the faculty and football for the alumni.

That (and the sex abuse) aside, leaves the sheer oddness of grafting a huge semi-pro sports league onto the system of higher education. Only in America.

Inequality

2011-11-11T15:41:00.002-05:00

Entertaining notes on inequality by David Brooks.

Especially this one:

Status inequality is acceptable for college teachers. Universities exist within a finely gradated status structure, with certain schools like Brown clearly more elite than other schools. University departments are carefully ranked and compete for superiority.

Status inequality is unacceptable for high school teachers. Teachers at this level strongly resist being ranked. It would be loathsome to have one’s department competing with other departments in nearby schools.

Not mentioned is pension inequality, but there was a good column by Jonathan Chevreau on this a few weeks ago in the National Post. Apparently the average hard-working Canadian would need about $2 million in their RRSP to be on a par with public sector union workers and their DB pension plans. Presumably the gap is the same in the US and the rest of the world's advanced welfare economies.

Also not mentioned is inequality in productivity, like 20% of the work force producing 80% of the value added. But that's something only fiscally conservative oddballs would even notice . . .

"We can't just rely on shopworn rhetoric,"

2011-06-19T15:21:00.003-04:00

he declared, relying on shopworn rhetoric.

Can Conrad Black ever not write.

2011-05-30T01:26:00.003-04:00

Regarding his Lordship’s latest fulminations in the National Post on Saturday (A world of financial ruin), has nobody noticed just how bad this dude is at writing? While Black’s prose is known for its overuse of Latinate words and generally bombastic tone, its outstanding feature is really just how plain bad it is.

So, starting at the top:

The present U.S. administration, building, certainly on unpromising leavings from its predecessor, has shuffled from one delayed reaction placebo to another to anesthetize financial markets with a sequence of consciousness-lowering deferrals. First we were waiting for the Simpson-Bowles debt commission, which held any actual attention to the problem at bay for nearly two years. It reported quite sensibly and sank like lead weight, but without a ripple. The administration’s budget proposed a dynamic eventual freeze on 15% of federal government expenses, a solution that underwhelmed almost everyone.

Apart from this being the usual vortex of orotundity: there is a missing comma after “certainly,” which probably ought to be “admittedly;” “unpromising leavings from its predecessor” is clumsy; “building” on “leavings” is a bad mixed metaphor; “delayed reaction” is missing a hyphen (although maybe that can be excused as the hyphen sadly does seem to be on the way out); “held attention to the problem at bay” is clunky; “reported quite sensibly” is an error – the matter of interest is the content of the report and whether or not it was sensible, not the manner of reporting; and “a dynamic eventual freeze” is both awkward and contradictory – what is a dynamic freeze supposed to be?

Elsewhere:

The world’s reserve currency, the fabled vehicle of the “faith and credit of the United States,” is now virtual money — a symbol for all the other massive problems afflicting the U.S. economy. The imported share of America’s oil consumption, for instance, has gone from 20% to 60%. Large suppliers like Iran and Venezuela have become hostile countries. Yet Americans remain neurotic about paying half the gas price of other oil-importing countries.

The expression is “the full faith and credit of the U.S. government.” “[S]ymbol for” should be “symbol of.” When quoting changes the time scale is usually included unless it is obvious: when did imported oil make up 20% of America’s consumption – 1960, 1970, 1980? “[H]ostile countries” should just read “hostile;” otherwise the sentence implies that Iran and Venezuela changed from suppliers into countries; but they were always countries.

Furthermore:

Unless the United States has the most spectacular cognitive awakening since Brunhilda, if not Lazarus, the laws of arithmetic are going to assert themselves in Zeus-like terms.

Meanwhile, the European Union is a water-logged vessel in a tempest, frantically bailing. In the six weeks since French finance minister Christine Lagarde last bravely proclaimed her personal fantasy that Greece would not default, the interest on Greek government notes has risen from 20% to 26%. Germany will not indefinitely remain so encumbered with guilt for the Third Reich that it will go on eating the costs of the false prospectus Goldman Sachs assisted Greece and others to file when they joined the Euro.

Brunhilda didn't have a “cognitive awakening;” she just woke up. Vessels don’t bail, frantically or otherwise; the crew does that. The laws of arithmetic asserting themselves in Zeus-like terms is another addled mixed metaphor; laws are not animate and so don’t assert themselves; Greece didn’t make a joint application apply with “others” to join the Eurozone – so it should either be “prospectuses” or just Greece. Sloppy writing, sloppy thinking.

Next is:

The EU is in hot contention with the United States as the Sick Man of the Great World Economic Powers, because less than 40% of Eurozone citizens work and over 60% are on benefits of some sort. But not to be discounted in this gripping Olympic contest for total fiscal immolation is geriatric, debt-ridden, stagnating Japan, a great but terribly beleaguered and demoralized country.

Sick men in hot contention; that’s a good one. “[T]he Great World Economic Powers” should use either “Great” or “World” but not both. The second sentence lays on the superlatives with the proverbial trowel, the bad writer’s favourite implement.

And:

It is on a slow and perhaps shallow rebound from New Labour, whose only novelty was that it took them three terms rather than only the one required by Attlee and Wilson to bring the country to the brink of ruin, speaks English, has a good legal system and has been one of the most respected nationalities in the world without interruption since the rise of the nation state approximately 700 years ago.

The “It” here is the U.K. Skipping the first clause this reduces to “It . . . speaks English . . .” which is wrong, as countries don’t speak, people do; and while the point is sometimes made in discussions of globalization comparing India and China that the former has a large population of English speakers, we don’t really need to be told that this is also true of England.

Absent the first clause the preceding reads: “It . . . speaks English, has a good legal system and has been one of the most respected nationalities in the world without interruption since the rise of the nation state approximately 700 years ago.” A pretty good imitation of Grade 9 essay style.

Also:

When Britain can’t lead as it often has, as recently as with Thatcher in the ’80s, it still muddles through.

This means to say that Thatcher was an example of old-time leadership, not of muddling through; but a reader who didn’t know Conrad’s political biases would have a hard time figuring this out as it isn’t clear from the sentence itself.

And there is much more of the same. Anybody who wants to can download the column and redpen it up themselves, for an hour of harmless fun.

Of course, it could be objected that this is all nit-picking, but when you’re at the point where you can’t even see the body for all the lice it’s an issue. Writing a newspaper op-ed isn’t just about making your point; it’s also about presentation, in the same way that you don’t go to a job interview in your underwear, even if you do have solid skills and a good resume.

Amazingly, Conrad Black has managed to maintain a reputation as some kind of prose stylist (even after the duncical titling of his biography of Nixon as “The Invincible Quest”) when, stylistically, he is really the naked Emperor of Canadian journalism.

Tech II

2011-05-11T18:37:00.003-04:00

The wreck in tech stocks back in 2000 was the market’s way of telling investors that their expectations were running away from them. But change doesn’t stop and while the market megawobbled real progress trundled on. A couple recent items showing how the grind continues: Microsoft is planning to buy Skype, and Google wants to develop a driverless car.

Both of these technologies seem to be gaining traction. Video telephony has been around as a concept seemingly forever, but is now turning into reality. The driverless car is a more audacious concept, but the Goog seems to believe it is actually doable.

Both of these developments would have major implications, but especially the latter. Google’s chief of driverlessness asserts that switching to a system of robo-cabs could cut the US car fleet in half (just think of how many driver-owned cars are sitting idle for most of the day). That would be an astonishing kick in the ****s for an auto industry already staggering under the weight of global overcapacity. And it would hammer employment in the driving industry (trucks and taxis), one of the biggest employment categories in the economy, and an even bigger part of the non-specialist economy.

The effect on the corporations would also be huge: Microsoft would become a major telco, Google a transportation giant. Both have outsized corporate-imperial ambitions; Google’s seem to be verging on the insane – but maybe what is really crazy is the technology.

More generally this suggests a bizarre future landscape of uncertain but potentially enormous opportunities, with Transformer-like corporations reconstituting themselves on short notice to acquire massive new capabilities. Interesting times.

What It All Means

2011-05-06T21:05:00.002-04:00

From out of a nothing election a major realignment. If this site had actually made a call it would have been for a retread of the last Parliament – although it was clear by the last weeks that bigger changes were coming. But the true pundit never allows a wrong forecast to overshadow an authoritative post-game analysis, and in that spirit we offer the following summing-up of who stands where:

The voter. Actually, the centrist Anglophone voter, re-confirmed as the unquestioned boss of Canadian politics. The majority in Parliament is just the visible reward for Stephen Harper having humbled himself for years before a sceptical the middle-of-the-road electorate. There has probably never been an aspiring leader who has had to undergo such an lengthy and stringent probationary period. Rolling back government, cutting spending, permitting private health care and all the other planks of the hidden agenda are totally off the table. Banning abortion or gay marriage are at the bottom of the ocean (where they ought to be, btw). And the PM knows it. He governs at the voters’ pleasure.

Stephen Harper. Chastened by the realities of what is possible the new PM has promised to behave. As a reward he is no longer chained up in the kennel but free to run around the yard. Having internalised the discipline of centrism, however, the PM can expect a nice life. He is free to work away on his long-term plan to tilt the political balance permanently to the right as long as its done quietly and there are no surprises. Within the Party he is in great shape as a successful commander. There won’t be a peep out of the troops. Looking outwards, the Liberals have been crushed, the NDP aren’t serious and there is no Quebec to deal with – they’re now the NDP’s problem. The PM can play the long game, or he can retire with honour at the end of four years. Things could be worse.

Tory MPs. Step and fetch it. Bow and scrape. Lick and spittle. Kiss the ring and polish those apples. Junior ministries for those who keep their noses clean and their shirts brown (or the other way round). Great prospects of re-election in four years for those that need the pension qualifying period.

The NDP. The entertainment value of Jack Layton bouncing into Stornaway is going to be hard to top. Life is certainly going to be interesting for the new kids from the Bloc, er, . . . on the block. The Parliamentary cohort now looks like something created by Dr Francophone, sorry . . Frankenstein, with 60 per cent of MPs from Quebec, and many of them clueless newbies. Jack is going to have his hands full. Unlike the disciplined ranks of Tory Storm Troopers, this crew is going to be all over the place, and they won’t be shy about bawling out Quebec’s latest demands – in fact, their constituents expect nothing less. One wonders how long it will be before some of the old-school anglo socialists start looking back at the good old days of just 35 seats and a manageable party instead of the Siamese twin that the gods of politics have fused into being. Worth noting is that they only have 43 seats in the ROC, where the Tories outnumber them by more than 3 to 1.

The Liberals. A great example of success breeding failure. Years of winning resulted in the leaching away of any actual convictions. The party became all operators and strategists but stood for nothing. A rotten tree waiting to be blown over. Continuing complaints about unfair Tory attack ads show that a lot of people still don’t get it. The Libs now have to completely rebuild. They are not dead forever as there is certainly a space for a centre-left party. But they won’t be able to do this for the next election, which means it will be a decade before they have a hope of getting back to power.

The Greens. Seats up, vote down. More evidence, as if any was needed, that ecological concerns are blown about like a leaf by the gusts of the economy. Elizabeth May’s reserves of kooky good cheer are going to be tested over the next four years.

Fiscal conservatives. Absolutely nowhere. Just like before the election.

Rex on the base.

2011-05-01T14:43:00.003-04:00

While Rex Murphy’s opinions sometimes spray forth in all directions, like the spittle from a prolix and over-excitable pundit (to pick a random metaphor) – he is on the money with this one.

Everyone but the hardest Tory partisan has to be ticked off with the Harper campaign. Has it not, from the very beginning, been built on the presumption that Mr. Harper and the Conservatives own a fixed swathe of Canadian voters. To them, it says: "You are ours and you can go nowhere else."

That presumption is finally riling even the fabled "base." People recognize when they are taken for granted. They may allow it for a while, but then it rises to insult. They also know when they are being played — as when, for example, the Conservatives keep dragging out their eternal gun-registry politics, ringing, as they think, a Pavlovian bell for their deepest supporters.

Mr. Harper thought all he had to do was warn about the madness of electing the other guys. How feeble. That coalition message has the odour of entitlement to it. It is not a commanding virtue — this should be inscribed in every campaign booklet — that you are not the other party. Harper made his campaign about a fort to be held, not new territory to be taken. That is neither attractive nor brave.

Of course, as per the old joke, you don’t have to outrun the bear; you just have to outrun the other hunter. And the Tories are doing that.

Israel's critics. Strangely quiet.

2011-05-01T13:55:00.004-04:00

The following is a letter from the April 28 edition of the National Post regarding the near-total silence on the suppression of human rights in the Arab world on the part of the relentless, vociferous and vocal permanent critics of Israel.

Worth repeating, as this is a point that can’t be made too often.

RE: Syria’s UN Penalty A Slap On The Wrist: 416 Killed, But Assad Doesn’t Seem Worried, April 27.

As the tanks roll out in Syria and protesters are summarily shot throughout the Arab world, I’m waiting to hear the vociferous condemnation of these regimes from those strident voices of the left like Jennifer Peto, Nick Day, Libby Davies, Sid Ryan, Khaled Muammar, CUPW, CUPE, QuAIA (Queers Against Israel Apartheid), Tim McCaskell, Naomi Klein, et al.

When can we expect to hear their calls for an economic boycott of these regimes? When will flotillas set sail for Manama, Lattakia, Bandar Abbas and Tripoli? Which week will they choose for their “Murderous Arab and Iran Regime Week” at our universities? When will they be making visits to these countries to stage demonstrations and to challenge the regime’s leaders and military?

Likewise, I’m can’t wait for the million-plus Arabs living in Israel to rise up and resist the democracy, high standard of living, first world infrastructure, free press, education, health care and economic opportunity that has plagued them as citizens of Israel.

This is the golden age of opportunity for “social justice activism.” I can’t wait for these groups to get started on these campaigns.

Michael Ross, Victoria.

The Last Days of Michael Ignatieff

2011-05-01T13:25:00.003-04:00

With the conventional wisdom assured of a Liberal collapse, the writing is on the wall, the curtain poised to drop and the fat lady warming up for the man who would be philosopher-king. While predictions have been made that the vote might well end up shaking all the leaders out of their trees it is pretty clear that Iggy is going to be Coconut Number One. The Tories will likely get a sturdy minority, the socialist wave will allow a celebratin’ Jack Layton to eventually depart at a time of his own choosing, and in the Twilight Zone of Bloc politics . . . well, will anyone even know what happens to Gilles Duceppe?

But in a newly crushed and bewildered Liberal Party the demands for renewal will be irresistible. So back to college for Iggy. And in fairness to him, he wasn’t that bad – neither malevolent nor incompetent, which puts him ahead of most politicos right out of the gate – not as massively clueless as Stephane Dion nor as directionless as Paul Martin, and certainly no worse than the average for Cabinet or shadow-Cabinet level MPs, although given the talent level on all sides of the House that is maybe not saying much. Had things been otherwise he could have performed a passable imitation of a Prime Minister. But of course things aren’t otherwise. In part, Michael Ignatieff’s political career is a lesson to amateurs. You might think you know the game, but actually being out there is harder than it looks.

The Libs have now had three failed leaders in a row, with Ignatieff probably the most blameless of the three - for what little that is worth. The Party’s real problems go much deeper. It is now suffering the after-effects of the success of the legendary Liberal Brand – years of unquestioned success, culminating in its transformation under Jean Chretien into a blind and limbless parasitical political organism whose only purpose was to win the next election. In the meantime the withering away of whatever actual political reason it might have had for existing proceeded apace. This will not be fixed anytime soon. So, a stony road ahead for Canada’s erstwhile Party of Smugness. Once the bandages have come off and he’s been back at Harvard for a bit, writing his next book and jetting around on behalf of whatever NGO he’s heading up, Mr Ignatieff will probably appreciate that things didn’t turn out that badly after all.

Voting Libertarian

2011-04-22T17:51:00.003-04:00

Given that the two main parties are merging into an undifferentiated mass of centrist goo, what are the options for the rational voter? The Expenditure Party is going to be in power in the next Parliament as in the last whatever oh-so-boring configuration of majority, minority or coalition is realized – which means more deficits, more debt and lots ’n lots ’n lots more spending.

For the principled few who do not condone this unstoppable cancerous bloat the choices are as follows: vote Conservative as the lesser evil (plus they’re claiming to cut corporate taxes and they support Israel); stay home; spoil the ballot; or vote fringe.

The first three of these are just too passive; they don’t communicate any specific dissent and their executors – disaffected fiscal conservatives, non-voters and spoilers – just end up being ignored.

Then there is this:

Our bottom line spending cuts average 10% annually, for each of the next four years. Last year $57-billion was transferred to other levels of government, an increase of $16-billion in just five years. We would reduce these transfers by 25% each year with the plan to eliminate most transfers in the second mandate. Taxes would decline proportionately after the deficit is eliminated in the first year. We would replace the current maze of complex tax breaks and special favours with a single flat tax. The people who support endless expansion of government may decry this reduction as too rapid, but it would only roll spending levels back to those of 2004, after four years.

Nobody else is talking about cutting government, just as nobody is talking about slashing our corrupt tax code (and certainly not the Conservatives, who continue to add loopholes and giveaways anywhere they think they can scrounge a vote). The Libertarian Party is putting these issues forward. Obviously, they aren’t a government in waiting - but they are a great vehicle for a protest vote.

And fringe voting is actually effective. 10,000 extra votes for a minor party puts them – and their concerns – on the map. The same number of votes for one of the blob parties is nothing.

Hereinbefore, therewith, moreover, heretofore and forthwith, with all good consideration and due diligence owed the first part of the party of the first part and all their encumbrances, and by the power invested in this website, My Conservative Dreamworld endorses voting for the Libertarian Party of Canada as the least futile strategy at this crucial moment in our great nation’s history.

At the Advance Poll

2011-04-22T14:06:00.002-04:00

Delays of over an hour at least at some polls in downtown Toronto. Apparently Elections Canada was not expecting much of a turnout. Well, maybe they are just out of practice, as elections are so infrequent.

If this happens to you, you can complain via the 1-800 number on the voting card - as long as you believe that there is anybody at Elections Canada who gives a sh*t about you wasting 90 minutes of your day.

Very Important Election Issues

2011-04-17T19:43:00.002-04:00

Some very important issues for the current campaign:

. . . . . . . zzzzzzzzzzzzzzzz

Getting It Wrong with the Globe

2011-02-15T17:09:00.004-05:00

Today's Globe and Mail on the impending $3.7 trillion US budget. This comes with the following graphic (which takes up most of a two-page centrefold in the print edition). To add some historical context it shows revenue and expenditure - in inflation adjusted dollars - for the last 80 years or so.

Except . . . a closer look shows that, according to the scale, government dollars in and out have been wobbling around the $20 billion mark since 1950. Since this would amount to an annual tax take of about $66 per person it can't be in today's money.

And then, America has twice as many people 50 years ago, those people are at least twice as productive and government takes a bigger slice of the pie than it used to. How does that translate into government revenue in 2010 being less than in 1960? That's some inflation-adjustment. Or maybe it's just that the Globe had to fire some fact-checkers as circulation spirals down to a hard landing.

Telco balls-up

2011-02-05T20:40:00.003-05:00

Another revolting development in the dismal saga of government regulation of the telcos. A federal court has overruled the Harper government’s overruling of a competition-killing ruling by the Telecommunications Oligopoly Board (also known as the CRTC). As a result Wind Mobile, okayed for business in 2009, and having worked to build a customer base over more than a year, is being told that it’s not okay, that they are – horrors – foreign-owned (as their capital originates from Egypt, of all places; ironically a jurisdiction even more indifferent to modern communication than Canada).

This does not take effect at once, of course. The company has been given a breather for 45 days to prepare their response; they will probably appeal, the government will probably appeal (to preserve Cabinet’s scope of action), and the whole thing will drag on. And on and on.

While it is always tempting to lash out at the courts for this dim decision, the real fault likely lies elsewhere. Courts can’t disregard the law, however stupid it may be; they have to validate what is written. More responsibility lies with the government for trying to do an end-run around retrograde legislation instead of just repealing it outright. Admittedly, this might not be easy for a minority, as the opposition parties would fly into flag-waving hysterics at the mere mention of a foreign-owned company attempting to enter our sacrosanct communications market. At the least, though, the guv should have scoped out any potential pitfalls in their approach, maybe by asking a law prof if it would stand actually up to a challenge in court. They appear not to have done this – but then again they’ve only been in office for 5 years, so the idea of due diligence is probably still a bit new and strange.

This site doesn’t have any opinions about the legal technicalities of the ruling (except that nothing could be more boring). But the main point isn’t the law: its oligopoly and protectionism. What matters isn’t foreign-ownership – it’s lower prices. A cell phone company owned in equal parts by Mexican drug lords, Saudi princes and Robert Mugabe – if it offered better rates – would be a huge improvement over market control by Telus, Rogers and Bell and their sock-puppet discount arms. Not coming any time soon, though.

Good news

2011-01-22T20:10:00.003-05:00

Every now and then in the weird, dismal and depressing news stream a few cheery items come bobbing along. First off, in New York Governor Andrew Cuomo is thinking about axing jobs – government jobs, and quite a few, in fact – up to 15,000 according to the Times. It’s a start. The Economist of a couple weeks ago put the coming battle with public sector unions on the front cover. The lead editorial was a little too conciliatory but at least there are signs of people waking up to the social catastrophe that public sector unions represent.

Elsewhere, from the often wacky world of health news, a little ray of light came in the revelation of the fraudulence of the alleged contribution of the MMR vaccine to autism. Pseudo-science doesn’t often get so totally torpedoed in this way, so it’s nice to see it when it happens.

Then there was the study in education suggests that test-taking can actually improve learning more than other methods. Mud in the eye for the teacher’s unions and the other flaky defenders of unquantifiable, results-free teaching, for whom it is an article of faith that test-taking is irrelevant when it isn’t damaging.

And finally, Bjork is on the warpath against Vancouver-based Magma Energy Corp, seeking to prevent the takeover of an Icelandic geothermal energy producer. This is exactly the kind of thing a variety of pundits predicted in the run-up to the Harper government interfering with BHP Billiton’s attempt to take over potash production in Saskatchewan: that it would inspire protectionists and other enemies of trade everywhere. We applaud this campaign and hope that Canadian investments overseas are blocked, blocked and blocked again until it starts to sink into the cementheads at home that this isn’t the way things work in a global economy.

Of course, public sector unions, teachers unions, health kooks and protectionists are about as well-immunized against reality as it is possible to be. So hearts and minds aren't going to be won there, no matter what the news. But it may help to erode the credibility of their positions with the general public, by however little. All in all not a bad week for common sense.

Confused on Potash

2010-11-07T15:30:00.006-05:00

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

2010-10-26T00:36:00.003-04:00

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

2010-10-25T01:01:00.003-04:00

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

2010-10-24T02:07:00.005-04:00

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

2010-10-22T00:31:00.002-04:00

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).

Transit for the Rich

2010-09-25T14:47:00.003-04:00

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.

Kay on denialism

2010-07-17T15:19:00.005-04:00

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.

G20. So sorry you're gone.

2010-06-27T21:19:00.003-04:00

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. . .)

Iron fist

2010-06-21T22:27:00.004-04:00

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.

Getting it Wrong with Michael Bliss

2010-02-18T00:20:00.002-05:00

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

2010-02-15T15:13:00.004-05:00

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

2010-02-15T14:11:00.003-05:00

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.

Our crap-ass justice system

2010-02-14T20:57:00.003-05:00

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

2010-02-03T19:10:00.002-05:00

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

2010-02-03T18:19:00.003-05:00

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.

Rolled

2009-10-17T21:32:00.004-04:00

Canadians face a retirement crisis. So the Globe and Mail. People are living longer, but not saving enough. Private pension plans are on the same track as the Big Three or the newspaper business. None of this is news exactly, having been the preferred wail of actuarial Cassandras for some years now, but the near collapse of the stock market last year seems to have stepped in to play Hurricane Katrina to the private pension sector’s rotten and unprepared New Orleans. Its not a potential mess anymore.

But of course not everybody is without a lifeboat. Try this: Who will survive Canada’s retirement crisis? A. Colonists on Mars. B. Mullah Omar. C. Public sector employees.

Yes, according to the Globe, 84% of public sector employees have pension plans and 78% of those are the good kind (defined benefit). The number of non-public-sector-union scum who get the same deal isn’t exactly zero, but its close enough. So the (pensionless) general public is going to be supporting the bullet-proof, gold-plated entitlements of public sector employees for generations. Imagine that.

In other news, the Canadian Press reports that the cost of building a kilometer of road is 37% higher in Quebec than the rest of Canada. Something to do with collusion among construction companies, allegedly, and also possibly involving the participation of a somewhat opaque organization known as “the Mafia”.

This is not to suggest that these two disparate examples of John Q Public getting rolled are at all similar. Collusion, conspiracy and consorting with shady organizations with a view to racketeering are not just disreputable but also illegal. A person could to prison for that kind of thing. In theory, anyway. Public contracts with public sector unions, by contrast, are openly negotiated and entirely legal. Yes, the public is getting shaved and paying a little too much – or way too much – for what it is getting. But such similarities are purely coincidental. And anyway, roads are still getting built. It’s not like they glommed off all the money. The passport office, the lottery commission and the Immigration and Refugee Board are still running.

The other, somewhat depressing, common element to these stories is how unimportant they are. The CP story reports that the authorities seem determined to peddle the issue as soft as they can. Organized crime expert Antonio Nicaso is quoted as saying “I don't think in Canada there is political will or commitment to fight organized crime.” A national two-tier pension system is just as yawn-worthy. The bedrock fact is that Canadians have been trained to pay. Whether this group or that group siphons some of the money off, well, maybe its somebody’s business, but, really who cares....

What if they threw an election . . .

2009-09-04T01:00:00.006-04:00

and nobody came? With the turning of the season, some genetic alarm clock rings off in the limbic sub-brain of our politicos (do they even have any other structures in the space between their ears?). Fall colours, cooler nights – and we have to have an election! Yes, that’s it. As soon as their leaders give the word party honchos, like demented squirrels scrambling to pile up the acorns, go into overdrive to build up their “war chests” and pile up stacks of flyers nobody wants. Wouldn’t it be great if for once the public just told them all to take a flying leap? If the response to the call was a total non-response, i.e. a boycott. Imagine an election where the turnout was 5% - candidates, their wives/husbands, campaign staff and other hangers-on and party hacks ... and nobody else. It wouldn’t make any difference, of course, but it would at least be an appropriate symbolic gesture.

If you think about it, there are probably few things as richly irrelevant as Canadian politics. The big issues (global finance, global trade, global warming, the price of oil, the coming pandemic, etc) are beyond our control. The parties are indistinguishable apart from their self-important heads; if the Conservatives and Liberals swapped everything except their leaders and colours it would be months before anybody noticed. Jack Layton might as well be in the prison dimension with General Zod for all that the average person knows or cares. Government spending is all spoken for – debt, transfers to provinces, individuals, etc. Set in cement. There probably isn’t more than $1.3 million in discretionary funds. Let’s see, to fund the Court Challenges program, or revive NAC, or maybe something new and different, like rent a Predator to hover over Ellesmere Island for three months (standing up for Canada!) or establish a chair in family law at the University of Malawi (building the global rights culture).

And imagine the campaign. EI. Omar Khadr. Saving the auto industry in Southern Ontario. Carbon capture and storage between now and 2050. Unbelievable and unbearable. If ever there was a time for total, supine apathy, now is it. Election response: don’t watch, listen or participate. It's like feeding the baboons. It only makes them behave worse.

Pseudo-workers

2009-07-23T00:22:00.004-04:00

For most of human history work meant manual labour, often difficult, dangerous and wearing. With the rise of machines and cheap energy to fuel them, forward-looking thinkers began to speculate about a future age of leisure, where people freed from toil would cultivate philosophy and the arts and other higher pursuits. We know how that turned out, of course. We’re busier than ever, leisure time is shrinking, and the highly paid elite – bankers, doctors, lawyers and so on are working even harder than everybody else. In short, another famously wrong prediction.

Except, if you look closer, those utopian dreamers weren’t actually that far off the mark. Physical labour really is pretty much done. Almost all of the heavy lifting it is now done by machines. We even have devices like the Segway, designed to replace walking – the ur-activity which marked us off from our chimp-like ancestors all those millenia ago. For more and more people work means interacting with customers or sitting in an office. But then, anyone who ventures out in any major city during “business hours” will find the streets, sidewalks, shops and cafes packed. People are sightseeing, strolling around, window shopping, snacking, slurping on lattes while surfing on their Netbooks. Who’s working?

Well, ok. Not everybody is out lollygagging; there is a noticeable weekday afternoon surge down Bay St in the direction of the GO trains, starting at around 3:45 pm. But then again, what are these employees actually doing? A nice little piece in the Post today by Rudyard Griffiths of the Dominion Institute makes the point. About 30,000 municipal workers are on strike in Toronto, and the city has not exactly been brought to its knees. In fact, apart from only a very slight increase in the amount of trash on the sidewalks an out-of-towner probably wouldn’t notice anything amiss at all. Griffiths states that economists who research this kind of thing believe that about a quarter of all government workers are actually “pseudo-workers”, who show up for the paycheque but do little or no meaningful work. (Of course, it isn’t hard to imagine that this estimate might be on the low side).

But the numbers in corporate bureaucracies are likely to be sizeable also. Then there are jobs which are completely unnecessary – like tax law and accounting, which produce nothing of net social benefit and would cease to exist if governments rationalized the tax code. Or the “work” being done in the justice system, where it takes 5 times as long to get a homicide conviction as it did 50 years ago, with no noticeable improvement in accuracy. The education system meanwhile churns out half-educated high school “graduates;” what is the productivity of a teacher whose students leave school as functional illiterates? Many of the better grads go on to fill up the institutes of higher employment-avoidance, er, sorry, higher learning and acquire degrees which they never apply. If the economic value of extra degrees in unnecessary subjects is nil, then so is the productivity of the professors who produce this surplus. Add in the economic value of Wall Street, now believed by many to be close to zero (as are ancillary activities like financial regulation and risk management). And all the non-work being performed in subsidized industries all around the world, producing products nobody wants – at least in the sense of being willing to pay for them.

The reality is that the number of people really needed to produce the goods and services we consume is not that great. Take away the young, the old, students, pseudo-workers, the semi-productive, people in useless jobs or doing busywork, the “officially unemployed” (really just the tip of the iceberg of the non-producing sector) – and there’s not a lot left to make up the numbers of the truly productive. The problem is that to acknowledge this by action – i.e. canning the unproductive and terminating their useless activities – could have a major negative impact on demand. The leisure society envisioned by yesterday’s dreamers had one major flaw: how to distribute the wealth. We have solved this by creating a system of fake work on a large scale, under a variety of pretexts, to soak up what would otherwise be massive unemployment. A Keynesian Ponzi scheme that continues to run and run.

Why Your World is About to Get a Whole Lot Smaller

2009-07-06T19:27:00.002-04:00

Ex-CIBC economist Jeff Rubin makes the case for peak oil and its implications in his latest book, Why Your World is About to Get a Whole Lot Smaller.

While the history of warnings of terminal depletion is almost as long as the history of oil production itself, it seems that this time the Chicken Littles really are coming home to roost. The bare facts are not encouraging. As oil wells are depleted pressure drops off and what remains becomes more and more expensive to extract. Most wells still have about half their oil left at the point at which they become uneconomic. Over time the US, the world’s largest single consumer of oil, has gone from being largely self-sufficient to heavily dependent on imports. In 1970 it was guzzling about 15 million barrels per day (mbd), but produced about 10. Now it needs 19 and produces only 5. In the UK, North Sea oil production peaked in 1999 and was down 43% from that peak by 2007. The UK is now a net importer of oil, as is Indonesia, formerly but no longer a member of OPEC. Mexico has slipped from being the number two supplier to the US to number three; its exports declined by 20% in 2007 alone and barring new discoveries are expected to skid downwards by 80% over the next five years, by which time the country will have ceased to be a significant exporter. The massive Ghawar field in Saudi Arabia, discovered in 1948 and still the world’s most productive single field, is now reputedly dependent on pumped-in seawater to maintain pressure. Overall, exports from OPEC barely grew over the first half of this decade and are expected to decline. This has been balanced mainly by Russian exports, up 60% since 2000. But Russian production did not grow in 2008 and is expected to remain flat over the next few years. With global total output at around 80 mbd, current production is declining at a rate of 4 mbd per year. So over the next 5 years the world will need to add 20 mbd just to meet current demand.

And that new oil is getting harder to find and produce. In one of the earliest wells, Spindletop in Texas, discovered in 1901, oil was struck at just 1,100 feet below ground. The recently discovered offshore Tupi field in Brazil, by contrast, sits under 2,000 feet of sea water, 10,000 feet of rock and 6,600 feet of salt. The Thunder Horse platform in the Gulf of Mexico is 120 miles off the Louisiana coast, a mile above the seabed, with the oil 3 miles below that. It was knocked over by Hurricane Dennis in 2005. Cumulative hurricane damage resulted in Gulf of Mexico production in 2008 being 20% less than in 2005. Globally, offshore fields now represent the single largest source of new supply; but because of wider pipes, they deplete about twice as fast as wells on land. In the Kashagan field in Kazakhstan the levels of hydrogen sulfide force workers to carry gas masks against the danger of asphyxiation. Other new developments are in hostile environments like Alaska or Siberia, or politically chaotic locales like Nigeria where 20 to 40 per cent of productive capacity at any given time is off-line because of attacks on pipelines or rigs. Alternatively, oil production in places like Iran or Venezuela is in the hands of nationalized companies whose limited technical abilities make it harder to add new capacity. In brief, the old conventional oil – from large accessible onshore fields in politically stable countries – is running out. Replacement oil – technically, politically and geographically ever more problematic and available in ever-decreasing quantities, demonstrates by its very nature that we are moving from the era of cheap abundance to that of expensive scarcity.

In terms of problematic oil a special mention needs to be made of Canada’s oil sands. The reserves are thought to hold about 165 billion barrels, or about 2,000 days of current global consumption. The exact nature of this horrifying gunk represents unequivocal evidence of how desperate the world is getting in its search for fuel. Every barrel’s worth of oil is mired in two tons of sand. The stuff near the surface can be mined by giant steam shovels which each gulp 4,250 gallons of diesel per day. This conventional sand mining has a terrible return on energy, requiring one British thermal unit (Btu) of energy for every three produced. A conventional oil well in the Middle East, by contrast, has an energy return of 100 to 1. The stuff (i.e. bitumen) which is too deep to dig out has to be extracted by applying steam at 1,000 degrees to make it hot enough to flow. And it isn’t as good as conventional oil: bitumen contains less hydrogen, so refining it into gasoline essentially requires the addition of hydrogen, making it more expensive in terms of both energy and dollars than conventional refining. The production of one barrel of synthetic oil requires the consumption of 1,400 cubic feet of natural gas, pollutes 250 gallons of fresh water and emits 220 pounds of carbon dioxide. Admittedly, some of these problems could be ameliorated: carbon sequestration could be implemented and nuclear power might eventually substitute for the natural gas used to create steam. But these fixes might take years or even decades to put into place and would drive up costs even more. It is all an awfully long way from just sticking a pipe in the ground.

But if the supply side is depressing, the demand side isn’t any cheerier. Rubin dispenses with a couple popular misconceptions, in particular that the heart of the problem is that the residents of the developed world just need to get out of their SUVs. The reality is that OECD oil consumption is price-sensitive and stagnant. In the developing world it is neither and this is where the future of demand lies. Regional consumption is as follows: US 19 mbd, OPEC + Mexico + Russia 13; Western Europe 12; China 7.5. So the developed part of these regions outconsumes the rest by only about 3 to 2. The growing populations and demand for cars in the developing world will run ahead of stagnant OECD levels. And while free-market economies impose the realities of supply and demand on Western consumers, their counterparts in producing countries do not face the same restrictions. Gas may have hit $4 a gallon in the US, but in Venezuela it is only 25 cents and just 50 cents in Saudi Arabia and Iran. While the Iranian government seems to be willing to take a hard line against cosmopolitan pro-democracy demonstrators in Tehran it quickly learned the folly of trying to ration gas in 2007 when it backed down in the face of riots. Estimates are that half the world’s population receives some form of oil price subsidy, affecting a quarter of global production. As the price of oil rises, of course, the producers become wealthier and are therefore better able to consume or subsidize even more. And even if production goes up, it may all be soaked up by increased local demand, so that exports remain flat. Because of an absence of alternative power sources in the Middle East, for instance, oil is actually a major source of electric power. Saudi Arabia is planning to triple electricity production by 2020. At the same time it is running out of water, as it is draining its aquifers. The future water supply will come from desalination, an energy-intensive process powered by oil. All this increased demand will be met by greater oil consumption, putting more pressure on global prices.

Another misconception which Rubin skewers is that conservation will help us out of this mess. This sounds sensible, but actual experience has been paradoxical. The developed world has already made great strides in energy efficiency. In the US home heating and cooling are 30% more efficient than in the 1970s. Fuel consumption per mile flown is down by 40% since 1975. And energy consumption per dollar of US GDP is down by almost 50% since then. The problem with all this is that as energy costs for a given activity go down, consumers simply respond by consuming more. So we have more air conditioners, drive bigger vehicles and fly more. Under stable energy prices, which the world enjoyed until relatively recently, conservation is offset by greater consumption. Under a regime of continually rising prices (the likely future), conservation simply delays the final resolution of the supply problem.

The only remaining option is substitution. Unfortunately there is currently no effective replacement for gas and diesel, which are essentially the world’s only transportation fuels. Ethanol is a charade, representing nothing but a transfer of wealth from taxpayers to agribusiness; the only thing it really fuels is food price inflation. The problem with switching the car fleet to electricity is that electricity is an energy carrier, not an energy source. Putting the US fleet on batteries would require an enormous new power source. Wind and solar are too weak, nuclear is a logistical and political nightmare and coal presents the unpleasant alternatives of massive carbon emissions or expensive carbon capture.

With the first half of the book laying out the problem, the second half considers the implications. According to Rubin pricey oil is going to punch a hole in global trade, on account of increased shipping costs. The fuel surcharge on a standard 40-foot container shipped from China to the US was $455 in January 2007 and $1,055 a year later. Extra shipping costs are economically equivalent to a tariff on imports. The rise in the price of oil from 2004 to 2008 offset the reduction in global tariffs over the last 3 decades. So the trade liberalization of the era of globalization, driven by tariff reduction, is now going to be neutralized by higher transport costs. The consequence, supposedly, will be at least a partial reversal of globalization, with factories returning to the US from China as the offshore wage advantage is wiped out by transport costs; America’s trade deficit will vanish as the nation reverts to the self-sufficiency of the 1950s.

The other problem with fossil fuel is of course carbon emissions. The pattern is the same here as with oil consumption: slow growth in the developed world, rapid growth everywhere else. The developing world may eventually surpass the developed world in oil consumption; in coal consumption it is already far ahead. Rubin recommends a carbon tax, to be imposed on domestic producers and on imports alike. This will, supposedly, be a win-win solution for the developed world. Because of its far superior productivity per unit of carbon emitted it has a huge competitive advantage over the low-wage regions. The carbon tax/tariff will cut emissions at home but at the same time encourage the return of long-lost overseas manufacturing. How the developed world will react to this proposal is not discussed.

Overall, the best part of the book is the first few chapters, which provide a concise summary of the oil supply-demand problem. This is peak oil in a nutshell, and a good introduction to the issue for people who haven’t read much about it. But much of the rest of the book misses the target. The chapter on shipping costs and the purported demise of the globalized economy is short and sketchy. It doesn’t emphasize sufficiently that the higher marginal cost of transport will fall mainly on low-value goods. A container of stuffed toys headed for the dollar store will suffer a much heavier tariff in relative terms than a container of memory chips. And as a counterexample, the yen went up 40% against the US dollar in the 1970s – that is, there was an effective 40% tariff on Japanese goods. But Japan continued to export. To the extent that production does shift back to North America for certain goods it is more likely to move to Mexico or to new, robot factories. The old jobs are not coming back.

More broadly, Rubin seems unreasonably sanguine about the demise of cheap energy. In some ways he seems to view it as little more than opening the door to a smaller but more liveable world of walkable urban neighbourhoods, bicycles and farmer’s markets. But the implications of peak oil are anything but comforting. The price spikes of the last couple years, with oil riding from $40 to $140 and back are likely to be repeated, only with even higher highs. The effect on the world economy will be chaotic. Reduced consumption doesn’t mean making do with less, turning down the air con, taking our vacations at home and so on. It threatens a deflationary spiral. As car makers and airlines, say, lay off workers they cut their own consumption, which affects all the businesses they buy from, resulting in lower profits and yet more layoffs. Add in higher transport costs and depressed international trade. While some American unions might welcome higher-priced Chinese goods, most low-income Walmart shoppers will not. The standard of living of America’s bottom quartile has been both undercut and propped up by globalization; expensive oil may raise prices for this group without increasing employment. While Rubin does have a point in observing that peak oil will do more to reduce US carbon emissions than a hundred Kyoto treaties, his suggestion of slapping a carbon tariff on Chinese imports seems plain batty. This is not the way to deal with a rising major power, which already holds a couple trillion dollars of US bonds.

Overall, the book has a slapdash feel, as though the author was in a rush to add to his list of publications. One suspects that it was quickly glued together from a bunch of CIBC research reports. Among the minor annoyances: the fact of global depletion progressing at a rate of 4 mbd per year is mentioned at least 5 times; Senator Phil Gramm is misnamed Gram; the figures for projected oil demand to desalinate water in Saudi Arabia in Chapter 2 are nonsensical. Chapter 1 is all about supply, and Chapter 2 about demand; except that at the end of Chapter 2 Rubin suddenly goes back to discussing supply again. The Middle East is characterized as “the highest per capita users of electricity in the world.” Apart from the syntax, this is presumably applies only to parts of the Middle East, like Kuwait or Dubai; it is hard to imagine that Egypt or Iraq are world leaders in the consumption of anything. In addition, Rubin skirts the really big picture, namely that oil depletion is just a part of a broader resource squeeze caused by the master driver of population growth. Well, it’s good to be outspoken, but one doesn’t want to go too far.

Bottom line: this is a decent quick summary of peak oil; the end of globalization is sketchy and speculative. Jeff Rubin could have written a much better book. As an economist perhaps he calculated that working out his arguments more thoroughly wasn’t worth the extra time and effort. On the other hand the topic isn’t going away and there won’t be any shortage of books about peak oil; readers may want to wait for the next one.

Sclerotic TO

2009-06-27T20:46:00.002-04:00

A great little blast here by Marcus Gee in yesterday’s Globe (“City of Toronto is falling off the same cliff as General Motors”). Among the highlights, one business study estimates that the average Toronto municipal employee earned 11.6% more than workers in comparable private sector jobs; if the full value of benefits is counted the discrepancy rises to 36%. This drives home the point that unionized public sector employees are not the exploited proletariat of yore but a closed shop aristocracy leeching off the taxpayer. Those progressive types who proudly fly the logo “Afflict the comfortable” might want to take a closer look CUPE and its role in Toronto’s imminent budget crisis.

Meanwhile the Toronto Board of Trade estimates that city labour costs have been growing at over 6% per year since 2003; if they had just kept pace with inflation at 2% the city would have an extra $1.5 billion on hand. More broadly, the city, like the storied automaker, is drifting towards insolvency, without a clue as to what comes next. To quote:

Turning around big, bureaucratic, unaccountable organizations like GM and the City of Toronto is a challenge. They have layers of hierarchy, dug-in unions and semi-independent sub-organizations that act as independent principalities – think Pontiac in GM's case, the Toronto Community Housing Corporation in ours. Toronto is further hobbled by a political system stocked by independent councillors with no party allegiance and no common platform to campaign under.

Such organizations easily lose sight of their original purpose. Instead of serving customers or taxpayers, they serve themselves. They become like a bland version of an autocratic Third World regime whose only purpose is to stay in power. Clinging to a stagnant status quo, they rot from within.

Finally, a great line (also from the Globe) where former ambassador to the US, Alan Gotlieb, cites Lester Thurow: “The greatest challenge in public policy is dealing with incremental decline.” Somebody should put up a banner in the Metro Convention Centre, or whatever temporary venue Toronto City Council chooses to hold its meetings at.

The unions we deserve

2009-06-26T21:26:00.004-04:00

Summer at last. And summer weather at last. And, at long last, temperatures warm enough to make the city’s uncollected garbage really stink, which is what municipal workers have been waiting for. Day 5 of the garbage strike and in places the air is intermittently stinky, although much of the time it really isn’t stinky at all. Which, in a way, is too bad. It is ultimately the general public, after, which is responsible for this mess, and so it is only fair that it should feel (and smell) the consequences.

As a note, unions have really come a long way since the bad old days of the 19th century, where child labour was a fact of life, the working week meant unlimited hours at starvation wages, and you could be prosecuted for quitting your job. And not much in the way of benefits, back then. Compare that to today’s demands for bankable sick days (18 per year), lavish defined-benefit pension plans, retirement at 55 and being unfireable once you’ve got enough seniority. In the old days unions had to face off against rapacious robber barons and their strikebreaking private security forces, as well as unsympathetic courts and police. Today, with labour rights set in concrete, the demand for unions to protect the working person has melted away. In the private sector in Canada only about 20% of the work force is unionized. The only arena in which the workforce needs the extra level of protection (or “protection”) that unions can provide is the public sector, which is about 75% union. Is this because the government is so oppressive, flint-hearted and powerful that the working stiff can’t get a fair shake? If you believe that you might also be interested in buying up a few tranches of collateralized mortgage obligations, guaranteed AAA.

Public sector unions are nothing but an open conspiracy to shake down the government. Unions strike, the public gets irate, and since there is no point venting at the unions the government takes the heat. Under pressure to settle and restore peace they cave. This last part can happen in two ways. Either directly, or, if that is too embarrassing, the government can save face by declaring the service in question to be essential and ordering the strikers back to work. The dispute then goes to arbitration. Since the strikers right to strike has been taken away the arbitrator awards them compensation, which usually turns out to be most of what they were asking in the first place. A short strike and a quick and favourable settlement; the elected representatives get the monkey off their back and services are restored. It’s win-win-win. And public finances are chipped away, by, oh, so small an amount you’d hardly notice.

This strategy has been quite successful. So much so that the old social compact relative to the private sector, where government employees took lower wages in return for greater job security, has been overturned. The new trade-off is guaranteed employment in exchange for higher salaries and better benefits. This is much too fair and equitable for the unions to give up without a fight.

While some commentary has taken the view that the mayor has enough public support to stand tall should he choose to do so, in the big picture what counts is not how this particular strike plays out but how to fix a chronic problem. What the city really needs to do is privatize. Starting with trash pickup, which is already private sector in all of Etobicoke as well as for condos and businesses throughout the city, to say nothing of most other municipalities in Ontario. After that there should be a review of all other city services. Anything and everything which can practicably be contracted out should be. Until this is done Toronto will be overpaying for municipal services and further handicapping its own economic development.

Sadly, the reality is that the residents of Toronto are prepared to accept a lot more of this kind of public sector union abuse. While there are reports of public “anger” at the strike in general, and pickets blocking access to trash drop off points in particular, this is the kind of anger that leads to extended griping, not political activity. The voters have no appetite for reform, and the unions know it. Their gamble that a few weeks of very temporary public displeasure are well worth years of future benefits is quite sound. We get the unions we deserve.

Sclerotic America

2009-05-14T19:14:00.004-04:00

A recent article in the New York Times reviews the dire straits of America’s Medicare and Social Security funding, with insolvency scheduled for 2017 and 2037, respectively. Piled on top of this is the question of how to fund broader public health care, with the apparently intractable problems of worsening demographics, inexorable rises in health care costs, the contradictory claims of restitution for malpractice and keeping insurance costs under control, and the varied and vociferous interests of the insurance companies, HMOs, corporate health plans, Big Pharma, doctors and nurses. But this impossible tangle – a conflation of the hydra and the Gordian knot – is just one of America’s many problems.

Immigration is just as bad: an impoverished population of about 100 million in Mexico and Central America, desperate to get in; a permeable border which cannot be controlled; the domestic cluster of a Latino voting block, left-leaning Dems, nativist Republicans, low-wage workers under never-ending pressure from even lower-wage illegals, the immigration bureaucracy, employers in meat-packing, fruit-picking and other low-margin businesses relentlessly seeking to cut costs even further, high-income earners (even in the upper reaches of government or progressive academia) who need cheap nannies and affordable domestic staff.

And then there’s crime. And prisons. Homeland Security. The insoluble problems of the underclass. Infrastructure, already underfunded by many years and trillions of dollars. Education, with its stagnant test scores, rising international competition, intransigent teacher’s unions, millions of kids with issues, millions of kids on pills, millions of kids who don’t want to be anywhere near a class room; no viable approaches to dealing with disruptive behavioural problems in class; a totally polarized debate about charter schools.

And the War on Drugs. A failure, to which the alternative is most likely just a different kind failure. The underlying issue is that America has, in spots at least, a deeply-rooted drug culture. As with guns, homicide and prison population, so with recreational drug consumption: the US is just running away from the rest of the developed world. While decriminalizing pot might be a sensible palliative option, for full effect complete legalization, including taxation, would be required; otherwise organized crime will retain the revenues. The question of what to do about crack, smack and crank is well beyond anything any elected official will even consider mentioning. The problem is that if there are enough people in the habit of taking these substances to be a problem, well, then you’ve got a problem . . .

Energy and the green economy. Holy. Switching the power consumption habits of a third of a billion people. Running mass transit on a suburban and exurban network built for the car. Nuclear liability insurance. Nuclear waste and NIMBY. Clean coal. Wind farms. Cutting CO2 while a certain large, well-known Asian nation roars ahead and sucks up even more manufacturing capacity. How to stop funding the gallery of quasi-criminal states (well, excluding Canada) who supply the oil; without making it even cheaper for foreign competitors, specifically aforesaid large country in Asia with extensive manufacturing capacity. Toss on expanding debts, bankrupt states, trillion-dollar deficits for as far as the political cycle can see. The military budget. Tort reform. The uncontrollably metastasizing tax code. Regulation. Banks right now are struggling with waves of mortgage refinancings and having to hire new staff to cope with the enormous amounts of paperwork for what should be an elementary financial transaction. Waves of financial regulation to come and armies of bureaucrats and bankocrats to implement them. Regulators for “systemic” financial risk. It might be unmeasurable, or even undefinable, but that doesn’t mean we can’t get our people on it. Lots of them. A 25-year expansion of credit, which has ended with financial sector debt standing at about 120% of GDP, compared to 20% in 1980. Overlevered governments, corporations and individuals who will need many years to delever their balance sheets, if in fact they ever do.

Which means, finally, that the robust growth which kept the system oiled over the last two decades is likely to dry up. No more consumers to keep it going. And without the extraordinary economic vitality which has hitherto covered up the multitude of its sins, America is suddenly going to start looking a lot less attractive. Some commentators have compared the US to GM – dynamic in youth, still robust in middle age, but finally overtaken by the sum of its misjudgments and all at once old, frail and perhaps incurably sclerotic. From California, arguably the quintessence of America, the rumour is that governor Schwarzenegger has grown sick of politics and can’t wait to get out, evidently recognizing that the tectonic gridlock is far beyond the power of a mere gubernator to affect in the slightest. America has deep and serious issues, a mass of politically intractable problems whose significance has been grossly underestimated during the long boom of the last two decades. As Jack Rebney would have it: no more.

Hope springs

2009-05-11T18:45:00.004-04:00

Green shoots sprouting through the rubble. No, not the economy, which is doing fine already; in fact, it's looking like the whole crisis thing was just a false alarm and we'll be back to a full-on boom by the summer. But to see somebody in politics, a conservative, no less, actually advancing conservative economic policies - that really is different. So props to Christine Elliott for promising a flat income tax for Ontario. There are three good reasons to support this. First, it simplifies the tax system, which is always a good thing. Second, it lowers the disincentive to be more productive. Third, and most importantly, it represents a commitment to honesty and accountability in public finances.

The political problem with "progressive" taxation, aside from the sheer perversity of punishing the most productive members of society with an extra marginal tax burden, is that it allows government to expand services for lower income voters by slapping an extra tax on the high-income minority. "Lower income" in this case can mean the bottom 75 or 80 percent of the population if the tax increase is applied only at the top level. Most voters therefore face the trade-off of increased public spending on the one hand and on the other a cost to them of . . . nothing. Who wouldn't go for that?

A flat tax, by contrast restores accountability to public decision-making. Voters who want more swimming pools, buses, hospitals or whatever can have them - but they actually have to pay up. Yikes. Yes, the flat tax as proposed by Elliott adheres to the usual meaning of the term - that is, it is a flat rate after a basic exemption (in this case 8% on income over $18K), so not a pure flat tax; but it shifts the fulcrum. Instead of trying to crowbar more money out of the top earners (who are also the top producers) most taxpayers would be facing some level of tax increase if the flat rate went up. More spending would mean more tax - for almost everybody, which is the point.

Most Canadians like their public services. Unfortunately, not everyone is completely forthright about facing up to their fiscal responsibilities. We like to push the weight off onto somebody else - onto Ontario, Alberta, Toronto, the oil industry, the banks, other corporations, commercial property, the rich in general. While utterly inconsequential instances of venality like Adscam envelopes or MPs padded travel allowances never fail to raise the national gorge, the gross political corruption of our tax system, the bloated hippo in the room, parades about in the open without attracting any notice at all. The GST - an honest tax which everyone is expected to pay (even though there is almost no one who won't try to duck it if they think they can get away with it) - is, by the same token, reviled.

Of course, flat tax in Ontario is a political non-starter. But, still, it's nice to see somebody with the backbone to actually mention it out loud; and more so at a time when fiscal conservatives in Canada seem to be heading for the endangered species list.

It's an ill wind . . .

2009-05-04T18:02:00.004-04:00

While the Financial Times may have the best coverage of the economic meltdown it isn’t hard to find candidates for the worst, starting with the Toronto Star. The business “section” in the Sunday Star now consists of one page, or half the space given to Malene Arpe’s weekly celeb photo foldout and snarkfest (now pretty much the best part of the paper). Anyway, in this week’s half-baked offering David Olive takes time out to celebrate the collapse of the Irish economy. The former Celtic tiger has been a stone in the shoe of tax-and-spend types for some time now. It slashed corporate taxes with the result that the economy blossomed – and that fiscal conservatives here started agitating for tax cuts with a view to producing similar results, an argument the left didn’t really have any good answers to. Until now. Fortunately, the Irish let their good fortune go to their head and now have a property bust, rising unemployment and a debt-to-GDP ratio of around 80% (very bad – that’s actually a little ahead of where Canada was in 1996). So now, we see Ireland heading for an 8.3 percent drop in GDP just this year alone. That’s what economic reform gets you.

Of course, that doesn’t quite wipe out the growth it experienced in the last decade, to say nothing of the decades before that. According to figures here, the real growth rate (excluding inflation) averaged about 5.6 percent from 2000 to 2008, for a compounded total of 63 percent. So giving back 8 percent doesn’t exactly vitiate the pro-growth regime. In fact, if the Irish economy remained flat for the next ten years it would probably still outperform Canada over the 2000-2020 window. But never mind the facts. They got what was coming on account of their stupid corporate tax cuts.

Although when you dig a little deeper, the real reason that Ireland did so well pre-2008 wasn’t corporate tax cuts at all. It was EU subsidies:

Those who spoke with such confidence about the salutary effects of Ireland's pro-business climate had little understanding of what actually yielded Ireland's brief super-prosperity. Joining the European Economic Community (which eventually became part of the newly formed European Union in 1993) unleashed a flood of subsidies to pay for transportation and other basic infrastructure, and to support Irish farmers under Europe's notoriously protectionist Common Agricultural Policy.

This used to be the progressive line (sweeping under the carpet the failure to explain why half a century of subsidies never turned Quebec or the Atlantic Provinces into “Tigers”). Mr Olive is maybe so used to repeating it that he can’t stop blurting it out through force of habit. So to summarize the whole position: tax cuts and other free-market reforms caused a fake prosperity which lead to overheating and a devastating collapse –so devastating that it may offset several whole years of the last two decades of growth; except that the prosperity was really caused by EU assistance because corporate tax cuts never work. Well, never mind the logic. It’s mud in the eye for capitalism and the Fraser Institute and that’s all that really matters.

Quotable

2009-05-02T14:37:00.003-04:00

The best reporting and commentary on the ongoing and (probably) historic financial crisis is in the Financial Times ($3.15 at the newsstand, but still very good value compared to the Toronto dailies, and available even on Mondays). A nice article with a more philosophical tone by Alain de Botton from the other day. Now, normally the thoughts of French intellectuals on economic matters wouldn’t have much of a claim on most readers’ time, but this item is right on the money:

If we do not dwell on the risk of sudden calamity, in the money markets or elsewhere, and pay a price for our innocence, it is because reality comprises two cruelly confusing characteristics: on the one hand, continuity and reliability lasting decades; on the other, unheralded cataclysms. We find ourselves divided between a plausible invitation to assume that tomorrow will be much like today and the possibility that we will meet with an appalling event, after which nothing will ever be the same again. The Goddess of Fortune can scatter gifts, then watch as with terrifying speed a 50-year-old company disappears or a balance sheet is destroyed by toxic assets.

And:

We should, of course, instead remember the great pessimistic voices of history. There are two quotes I cherish for these sorts of times. One is from Seneca: “What need is there to weep over parts of life? The whole of it calls for tears.” The other is from the French moralist Chamfort: “A man should swallow a toad every morning to be sure of not meeting with anything more revolting in the day ahead.”

But read the whole thing.

Exactly

2009-05-02T14:17:00.002-04:00

John Ivison in today’s National Post is critical of the government’s decision to take a stake in Chrysler, citing an estimate that the cost is going to be $200K per job saved – or saved for the moment, since the odds are that Chrysler will eventually go under anyway. But the best part of the column is at the end, where JI takes a sideways swipe at Canada’s Unnatural Governing Party.

The Conservatives have now veered so far from the good graces of many of their core supporters that they may never recover. That's not to say they will defect to the Liberals, but it may be that in the coming months, contributions to Conservative coffers start to dwindle and there is less enthusiasm to turn out at election time.

Mr. Harper has shown himself to be a pragmatist without parallel in recent weeks -- which is not necessarily a pejorative term. But leaders must deal in hope, and the hope for many Conservatives is that they live in a country that rewards exceptionalism.

The partial nationalization of a dying company couldn't be further from those hopes.

Review: Shakedown

2009-04-30T20:31:00.003-04:00

Ezra Levant is a Canadian conservative activist, blogger and publisher who was dragged in front of this country’s human rights apparatus for republishing the Danish editorial cartoons depicting Mohammed. Since then he has been embroiled in a total of 20 different legal complaints launched by various aggrieved and affronted characters with miscellaneous reservations about the value of free speech. His response has been to write Shakedown, an account of the campaign of Canada’s human rights commissions to weed out incorrect and irresponsible expression, which is entertaining and disturbing in about equal parts.

While there is a great deal that could and has been said about the various issues involved one of the most noteworthy and telling is the degree of arbitrariness in the procedures of the human rights apparatus. The following irregularities are documented by Levant (many of them are neatly summarized in Appendix A at the end of the book):

The checks and balances which have been incorporated in the traditional legal system over generations need not apply in human rights (for brevity, HR) proceedings. For example, there is apparently no principle of double jeopardy. An accused can be charged with a complaint, then a nearly identical complaint can be submitted again by someone else. A complaint at the provincial level can be repeated at the federal level with its separate commission, or in another province, or several others, or, in principle, in all of them. HR investigators can, at least in some provinces, enter the home or workplace of a subject of investigation without a search warrant signed by a judge, something the police are not allowed to do. In addition, they can also inspect any document or other property (such as computers) without a search warrant. Subjects of interrogation may be required by law to answer all questions put to them. Investigators are not fire-walled from the police; they have in the past asked for and received confidential information acquired by the police using search warrants. HR processes do not always obey normal judicial restrictions. In a criminal trial, for example, the prosecution must reveal its entire case to the accused in advance. Failure to do so can result in the case being quashed. In some HR cases, however, information was disclosed only once the proceeding were underway; in one case after all the witnesses had testified, and then those documents which were disclosed turned out to have been partially blacked out, an act performed at the sole discretion of the HR commission. In a court of law, hearsay evidence is not admitted; HR tribunals are apparently not subject to this restriction. There is no clear requirement for HR proceedings to be public; hearings are made open or closed on an ad hoc basis. In one case an HR commission asked for reporters to be temporarily banned from court, a request the tribunal granted. On another occasion the commission even requested that the accused himself be barred from a part of a hearing against him (although this batty motion was not actually successful). Under criminal law, slow-moving as it is, there are at least some limits to how long a process may take, and cases may be dismissed if they do take too long to go to trial (as illustrated in the Askov case in Ontario). HR proceedings are apparently not subject to any such restrictions and may therefore drag out indefinitely. One set of proceedings (not a free speech case) involving a rape relief centre in Vancouver took 5 years to get to a HR hearing (and ten years to finally conclude). The Stephen Boissoin case was sparked by a letter to the editor written in 2003; the HR ruling was not made until 2008 and the appeal is still underway. Proceedings against Ezra Levant for republishing the Danish cartoons took place two years after the act. In Manitoba B’nai Brith was subject to a 5-year investigation for fomenting hatred. By way of thickening the police state atmospherics around the case the name of the complainant has still not been made public, nor the contents of the allegedly offensive speech nor the member of B’nai Brith who was allegedly responsible for it. HR investigators have acted as both investigators and as complainants (although the ultimate degree of irregularity whereby investigators investigate the claims they themselves have advanced has apparently not yet been reached). HR staff have launched lawsuits and law society complaints against critics of the HR process. They have also acted as agents provocateurs, creating bogus accounts on neo-Nazi websites and posting extremist comments there. (Your tax dollars at work). There appears to be no policy at HR commissions regarding the ethics or legality of investigators attempting to entrap offenders into committing speech crimes, or on the ethics or legality of investigators posting remarks which would be considered actionable under HR standards if posted by a private citizen. Investigations have been carried out against political websites against which no complaint has been made. There do not appear to be any restrictions on the sanctions which HR tribunals can levy. Perpetrators of prohibited speech may be subject to blanket bans of indefinite duration on publishing disparaging remarks not only about protected groups but also HR complainants or witnesses. (This is not only draconian, but more than a little bizarre, as “disparagement” would appear to be a stricter standard than that expressed in the original HR speech code. In other words, if this kind of thing stands up, there will be two criteria for prohibited speech: what is said and who said it (i.e. are you already under an HR gag order?). So much for constitutional principles). In addition, HR tribunals can demand that people publicly apologize for their previously stated opinions, a penalty which does not appear to be applied anywhere else in democratic legal systems. And finally, the crimes of expression which HR tribunals prosecute are far from clearly defined. Forbidden expression, according to the infamous section 13 of the HR act, includes “any matter that is likely to expose a person or persons to hatred or contempt by reason of the fact that person or those persons are identifiable on the basis of a prohibited ground of discrimination.” This could be almost anything, based not only on the generality of the term “likely,” but also on the wide net cast by “prohibited grounds of discrimination” which may include not only the usual statuses such as race, gender or disability but also things like source of income or political beliefs. So think before you speak.

All of this could be viewed as just the sloppy and amateurish attempts of people without formal qualifications (which the HR industry by and large does not require) to run something supposed to resemble an adjudication system. Levant notes that in an audit of its management practices the national HR Commission did not once get a grade of “best practice” or even “advanced practice” in 33 areas audited. But a better explanation is that the organization of the HR shadow legal system on the principles of totalitarian legality is neither inadvertent nor coincidental. Totalitarian legal systems claim the authority of the law, but without any of its limitations. Arbitrariness is central to such systems: after all, state power is really unlimited only if the state can do anything it wants. That is, accuse or arrest anyone at any time, drag out the proceedings without limit, charge the same offence multiple times, and impose any penalties it thinks fit. Other time-honoured features of police state policing include agents provocateurs who seek to entrap citizens, civilian denouncers who can report anyone else at a moment’s notice and at no cost or consequence to themselves, and widespread surveillance in case incorrect thoughts are expressed anywhere. The incorrectness of such thoughts is never clearly defined, of course; this helps to keep the citizenry on its toes. Other hallmarks of totalitarian law include forced retraction of opinions and self-denunciation, important for enforcing correct thinking and humiliating those who have the effrontery to voice their own views. And it is political imperatives, not actual violations, which are the driver for prosecutions. This is echoed in Ontario HR head Barbara Hall’s self-revealing remark that the number of HR cases is not high enough and “may have to spike.” Quite right. If you’re Himmler.

In short, the HR speech control apparatus is implicitly totalitarian in its roots: in its view that all expression can be categorized, namely as either permissible or impermissible; that impermissible expression needs to be controlled, that the thinking underlying it in turn needs to be suppressed and, since it has no legitimate justification, ultimately extirpated. Since hate speech has no legitimacy there need be no concern about the means used to get rid of it. Procedural abuse follows. In fact it is difficult to imagine any organization with the mandate of the HR speech control apparatus not adopting an abusive prosecutorial style.

But having said all that, we probably don’t need to keep the shotgun ready in the bedroom in anticipation of the 3 am knock on the door. The HR apparatus is an example of the totalitarian mentality in embryo, proving, as if any new evidence were needed, that this way of thinking will always be with us and that there will always people ready to step up to fill the slots in the inquistional bureaucracy. On the other hand, it’s kind of like a baby alligator. Not dangerous unless it gets a lot bigger.

What will keep the HR speech control system in check is openness and a sense of the ridiculous. Shakedown does an excellent job in the cause of both. In fact, aside from the plight of the victims dragged into this mire, the whole HR business is risible. There isn’t a single case in the book which isn’t silly. Probably the best stuff is the Nazi-hunting, the HR system’s number one priority, which amounts to the spectacle of one little gang of Gestapo wannabes snooping on another. Nazi chat sites are where our bureaucratic Web-surfers hang out, trying to raise the temperature. Levant even suggests the possibility that there may have been times when there weren’t any genuine neo-Nazis on these sites at all, only Canadian government employees trying to entrap each other (it’s not clear if they all knew each other’s fake identities). Nazi kooks, wacky bureaucrats, deeply offended oddball complainants, foaming imams: that is what comes out of the HR barrel of monkeys.

To close on the downside, however, while it isn’t very likely that the HR speech tribunals are going to grow into a full-fledged threat to freedom of speech it is not clear that they are going to go away either. While many of their practices, and even their existence, may ultimately turn out to be unconstitutional such a conclusion cannot be reached without many years or even decades of litigation, and, with all respect to Ezra Levant’s persistence and determination, it isn’t clear who has the motivation and resources to fight and win such a battle. The alternative, and more direct, route to the elimination of HR speech tribunals is political, but the obstacles here look just as formidable. The Conservatives voted to abolish HR speech tribunals at the convention in Winnipeg last fall, but this is really nothing more than the PM allowing the rabble let off steam. There is little reason to think that the Tories (or any other party) are going to come within a mile of this radioactive issue. And despite the mutterings of various MPs cited by Levant the old saw applies: backbenchers are nobodies. For movement on this issue the PM or at least the Leader of the Opposition is going to have to come out with an unequivocal stand on the matter. This isn’t going to happen, or at least not without a great deal of pressure from the public. Mere disapproval, as is clear from the example of the parallel “justice” system for young offenders, doesn’t get the job done when something is set in cement. So we are quite likely left with a standoff. The HR speech creature will have to lay off prey that it can’t swallow, like Maclean’s (too big) or Levant (too prickly), but it will continue to slither around in the weeds hunting various right-wing crawly amphibians and wiggly neo-Nazi worms of the online ecosystem. Despite Levant’s optimistic characterization of HR speech codes as being fundamentally un-Canadian there is more truth in Mark Steyn’s observation that many Canadians, like many Europeans, view unfettered freedom of speech as an American and suspect concept. Shakedown is an important contribution to defending our democratic rights, for which Ezra Levant deserves congratulations. But it isn’t the end of the battle, although it may be the end of the beginning.

To support the cause of freedom of speech in our wonderful country by buying Shakedown click here.

To contribute to Ezra Levant’s legal defense fund (sadly still a necessity) click here.

Health worries

2009-04-30T19:57:00.003-04:00

An interesting item in the Financial Times from a few days ago about the “nocebo” effect. This is the negative twin of the placebo effect: instead of making people feel better under the expectation that they are being treated it results in people feeling worse when they are led to expect to. As with the placebo effect it is hard to tell in any given case whether the effect is really all in the mind or not, but there appears to be growing evidence that people really are susceptible to negative suggestions.

When we expect something to make us ill – electrodes wired to our temples, for example, or, more routinely, a medicine with known side-effects – we start looking for signs of illness. And we’ll probably find some, says [psychologist Brian] Hughes, even if the pill is a dummy one or the electric field a sham. That is because unpleasant physical symptoms are a normal part of life for perfectly healthy people. Headaches come and go. Some nights it is hard to get much sleep, and some days it is difficult to keep our eyes open. We might feel light-headed one moment and in a bad mood another. These are all experiences that we would not think twice about were we not looking for signs that things are wrong. But when we are looking, it is easy to interpret a bad night’s sleep as insomnia, tiredness as fatigue, light-headedness as dizzy spells or a bad mood as depression – and then to reattribute those symptoms to whatever it was that we expected to harm us. And once we start believing that something is making us ill, we get anxious, which can itself exacerbate existing symptoms or induce others. “Anxiety generally leads to elevations in blood pressure and immune deficiency,” says Hughes. And more symptoms mean more anxiety.

A telltale sign is that the symptoms produced by any particular alleged cause are often manifold, so electrosensitivity, for instance, may result in headaches, insomnia, nausea or depression in different people; but then the whole symptom cluster is reproduced by multiple different causes: electromagnetic fields, chemicals, allergens, dietary imbalances, chronic fatigue viruses and so on all produce the same symptom cloud. (The usual list pops up again, for example, in this story about wind farms). On the other hand, measurable physical symptoms don’t seem to be produced with any regularity.

This is not to say that these kinds of unspecific symptoms never have an objective cause. Just that this is not the case anything like as often as claimed. The odds are that the well-publicized concerns of the worried well (in the developed world) about the ubiquitous wellsprings of toxicity are themselves the source of real distress and suffering on a wide scale. This also suggests that the alternative health industry, which specializes in treating the cases which flummox conventional medicine, is, by focussing people’s attention even more on their nocebic suffering, actively helping to make things worse.

Carbon mis-economics

2009-04-27T19:44:00.003-04:00

A clear, simple and common-sensical article in City Journal on the delusions underlying the drive to Green Power, by Peter Huber. Some of the key points:

The poorest 5 billion people in the world already produce more carbon than the developed world. In the future the gap will grow.

The poor are motivated almost entirely by price. Unless the developed world pays them to not use oil, coal and wood for fuel they will do so.

Alternative energy sources such as wind and solar may cost 5 to 10 times as much as the cheapest conventional source, coal. Regardless of any possible technical breakthroughs collecting energy from these sources will require major infrastructure costs and huge areas of land (for wind or solar farms), making them even less attractive to less developed regions.

Increased use of expensive alternative energy in the developed world gives the rest of the world a competitive advantage in industries based on cheap and dirty energy. In particular, reducing Western oil consumption by a significant amount would simply make oil even cheaper and more attractive. With much of the world’s oil supply costing only $10 per barrel to produce it is impossible to imagine it sitting in the ground.

A couple choice quotes:

Cut to the chase. We rich people can’t stop the world’s 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach. We can’t even make any durable dent in global emissions—because emissions from the developing world are growing too fast, because the other 80 percent of humanity desperately needs cheap energy, and because we and they are now part of the same global economy. What we can do, if we’re foolish enough, is let carbon worries send our jobs and industries to their shores, making them grow even faster, and their carbon emissions faster still.

We don’t control the global supply of carbon.

Also:

Poor countries all around the planet are sitting on a second, even bigger source of carbon—almost a trillion tons of cheap, easily accessible coal. They also control most of the planet’s third great carbon reservoir—the rain forests and soil. They will keep squeezing the carbon out of cheap coal, and cheap forest, and cheap soil, because that’s all they’ve got. Unless they can find something even cheaper. But they won’t—not any time in the foreseeable future.

And:

The United States would be in compliance with the Kyoto Protocol today if we could simply undo [anti-nuclear activists’] handiwork and conjure back into existence the nuclear plants that were in the pipeline in nuclear power’s heyday.

Finally:

The grand theory for how the developed world can unilaterally save the planet seems to run like this. We buy time for the planet by rapidly slashing our own emissions. We do so by developing carbon-free alternatives even cheaper than carbon. The rest of the world will then quickly adopt these alternatives, leaving most of its trillion barrels of oil and trillion tons of coal safely buried, most of the rain forests standing, and most of the planet’s carbon-rich soil undisturbed. From end to end, however, this vision strains credulity.

None of which is to say that environmental issues, and global warming in particular, are to be dismissed. And like most commentary on the environment, this sidesteps the central issue (too many people). But it's still a bucket of cold water over green daydreams.

Our ADD culture

2009-04-06T18:58:00.004-04:00

Robert Fulford’s Saturday column in the Post was a surprising endorsement of the Internet from the point of view of a literary journalist. Surprising because one would have expected someone as old and bibliocentric as Fulford to take a dim view of the new technology. On the other hand, he does point in that direction, referring to an item by Rebecca Traister at Salon titled “Stop the Internet, I want to get off!” This is mainly about a program called Freedom, a Mac application which turns off connectivity for those who need to work on their computers but can’t stop themselves from surfing, Twittering and otherwise wasting what is supposed to be working time. Traister has a nice take on the vortex of distraction:

And yet ... even as a comparative Luddite, I find myself bewitched, bewildered and deeply bothered by the number of minutes, hours, days I spend circling the online drain. As anyone who spends most working days staring at a computer screen knows, there is no such thing as sitting idle anymore. Those little desk toys they used to sell -- the plastic bird who teeters and totters until its beak finally dunks into the water glass -- are relics at this point. Like the notion of being unreachable at certain hours of the day or night, they are laughable reminders of a world long gone. Who would have the patience to wait for the beak to hit water? We'd all be hitting "reload."
. . .

Instead of watching plastic balances, we stare idly into a scrim of ever-updating images, words, videos, letter threads, some that calm us, some that raise our blood pressure, until finally the day is over, and we go home, log on, and do it again. Or at least I do.

This is right on the money. The whole cyber-experience appears to be deteriorating into a devils’ playground of nonstop diversion. The positives of instant access to supposedly edifying and relevant content out there are increasingly outweighed by a large scale destruction of attention spans. Old habits – at least among the literate – of reading for hours at a stretch look like they’re going the way of the printed newspaper. Eye-movement studies have discovered the notorious F-pattern used by many readers of Web pages: read the first two lines, scan halfway down, read another line, scan to the end. Done. Speed-browse the comments. Skip to the next article and then hare off on some totally random collection of links with no discernible thread at all the end of which you can’t even remember where you started.

Martin Amis’ the term “The Moronic Inferno” (originally intended as a description of the US) was evidently ahead of its time. But it’s not just the Net. The explosion of entertainment options, music movies and gaming seem to be creating for more and more people a new normal of 12 or more hours a day of screen time – a life of onscreen work, surfing, gaming, flat screens, iPods and smart phones embedded in an ADD culture which leaves less and less time for reflection and in which no individual cultural artefact really matters much because there is just such an overwhelming and incessant stream of output.

Paradoxically, the onslaught of electronic modernity seems to be undermining one of the key attributes needed to cope with it, namely the ability to focus, which is the common element to most high-skill, high-paying “top jobs.” The elite will no doubt continue to master the skills they need to attain the wealth they covet, include the skill of concentration. And they’ll teach them to their kids. So it isn’t inexorable doom: we’ll still have doctors and software architects. On the other hand the learning and studying capacities of the lower socio-economic 50% don’t look so likely to improve in the new attention-deficit world order, which may create widening social gaps in terms of both culture and life opportunities. The status of literacy, at least literary literacy, as opposed to being able to read a menu, as a defining element of middle class identity likewise seems to be facing long odds of coming through the intensifying cyberian gales. The consequences of this remain to be seen. But apart from the broader social implications, simply on a personal level, it is just not very appealing to spend more and more of one’s time in something like the mental state of a baboon on amphetamines, which is what the online experience tends to induce. If a little backlash is building up it’s not past time.

Non-news

2009-03-08T21:31:00.003-04:00

So John Tory didn’t have the right stuff after all and will have to be replaced by someone who does. And apparently over the weekend the NDP replaced old what’s-his-name with . . . somebody. At times like this you have to wonder: could anything be less consequential than Ontario politics?

At the same time the big picture is less than rosy. Real change is coming – not the kind rung in by soapy politicians but by large-scale economic trends. The days of this province’s have-notness are probably just beginning. The global storm that has swept aside many things, including the levees of automotive overconsumption, may leave North America with new-car demand pounded down from the old level of 17m new cars per year to a new long-term level of maybe just 9m. The barriers that sheltered Ontario from the global marketplace are gone. Will there be any room at all for Ontario in the new manufacturing order? If the CAW is making concessions, we probably really are close to game over. And in that case what will the role of our provincial leadership be, except to squat outside Parliament Hill and rattle the begging bowl even louder? Canada will survive; there’s oil in Alberta and diamonds up north, and potash in Sask or Manitoba or wherever it is, and the deprived provinces will have to get their cut, by equalization or however else. Our premier has already made clear that his number one priority is getting our fair share. Hell or high water. The two new leaders will certainly follow suit, so they will all three be on the same page as far as that is concerned. Meanwhile, the little matter of how we are actually going to earn a living, and make up for the partial or total loss of the auto sector is something that doesn’t seem to be attracting a lot of interest. As the rusting out process plays out it may never. Not a happy prospect.

Rise of the machines

2009-02-05T21:37:00.004-05:00

A very good article at The New Atlantis (via Arts and Letters Daily) on the advent of military robotics. Despite its high profile in science fiction, the reality has been rather slow in developing. As with earlier technologies, war has been the accelerator. The conflicts in Iraq and Afghanistan on top of the existing technological base widened the scope of possible robotic applications to an extent that would have been surprising even ten years ago. It doesn’t seem to be an exaggeration to say that in coming decades the nature of war will be fundamentally transformed. This will also bring to the fore a number of emerging ethical problems: do we really want to arm fully autonomous robots with lethal force?

Random notes

2009-02-05T21:24:00.003-05:00

Crime and non-punishment: How can prisoners improve their chances of getting back into the community? Being psychopathic seems to help. UBC psychologist Steve Porter found that in a sample of 310 prisoners those classed as psychopaths were two and a half times more likely to get early release. These offenders are typically more dangerous than ordinary parolees, and therapy may make them more dangerous still by teaching them more effectively how to pretend to be rehabilitated. Your correctional system at work.

More on fraud watch: Ontario lottery “insiders” won at least $198 million in prizes over the last 13 years. This would not even be a rounding error on Wall Street, but it is still kind of sad that so many hapless dreamers have been getting clipped for so long. The estimate, by Deloitte & Touche, is double what the foot-dragging OLG had previously estimated. Your Lottery Corporation at work.

Not getting it: Back to real fraud. The National Post’s own Pap Daffy sounds off about the Obama crackdown on executive compensation. “It’s a bad time for an exodus of talent.” Caps on executive pay will drive top talent from Wall Street at a time when they are needed most. While this site takes the view that executive pay is basically a matter for managers and shareholders to settle between themselves, in this case the government actually is a shareholder. Since they’re recapitalizing the financial loonie bins that used to be called banks they really are entitled to say how the asylums are going to be run. As for “talent” what in the world does this mean? The ability to single-handedly destroy more wealth than Hurricane Andrew? And where is all this amazing “talent” going to go anyway? The NBA?

Nobody home

2009-02-03T19:31:00.003-05:00

What is the point of being conservative in Canada? If fiscal conservatism were a city it would look like downtown Detroit – abandoned houses, grass growing through the sidewalks, no traffic, no people. Well, there’s crazy old Andrew Coyne in the bungalow on the corner. Some evenings he’ll sit out on the front porch with his shotgun on his knees, ranting about how they needed to keep the lid on expenditure growth in 2005-2006, while the squirrels scamper over the shingles. There’s the Manning house. He kept a column going in the neighbourhood paper for a while after he moved. Until they closed down. The Harrisses used to live across the street. They split up and he retired to Hawaii to work on his golf game. But there’s still the Church of Fraserology; the new building with all the fluorescent lights down a block. They’re still going. But you never see anybody in there. And nobody knows where they get their money. Kind of creepy, really.

But sprained metaphors aside, what is there? A few cranky writers in the print media (the wave of future – 200 years ago) and a rag-bag of Internet pamphleteers who are already on the trailing edge of cyberspace. In politics, by contrast, there isn’t a single elected spokesperson for fiscal restraint or productivity growth in the whole country. The two main parties, that is, the Red-tie Party and the Blue-tie Party are for all purposes one and the same. A student of political science who had access only to the contents of the country’s budgets over the last decade but not electoral results would be hard pressed to deduce whether or when a change of government had ever taken place.

Stephen Harper’s pursuit of the political centre has been relentless. That this has cost the party whatever character it ever had as an alternative to the Liberals no longer seems to figure in the strategic formulations of Canada’s Unnatural Party of Government. When it really comes down to it, what matters is power. Naive Reformers didn’t really understand this. But they do now. Jean Chretien, Canada’s grandmaster of parochial realpolitik, must be laughing his saggy ass off.

The Conservatives could have cut corporate taxes, raised the sales tax (or at least left it alone), accelerated debt repayment, held the line on spending and simplified the tax code. Instead they ran vote-buying budgets, complicated the tax code and dragged their feet on debt. They weren’t ready to stare down a weak opposition on a single matter of fiscal principle, although the PM was willing to risk the survival of his government on the less-than-critical issue of party funding.

Now the Blue ties have passed a budget which John McCallum and Michael Ignatieff could have written, which will do nothing to remedy the macro situation (which is beyond our control), and will, at best, simply lighten the load for some (but not all) of those whose boats are in danger of being swamped by the rough tides of the next twelve to eighteen months. This at the price of wiping out the last 13 years of debt repayment and turning politics into a big-government monoculture on the eve of what may be a global debt and currency crisis.

Our fair share

2009-02-03T00:42:00.004-05:00

A sad little milestone in the journey of this province’s decline was just passed with the introduction in the budget of a regional development agency for Southern Ontario. In an earlier day it might have been a mark of pride of some kind to be the last remaining part of the country that didn’t actually require federal assistance, but those days are clearly long gone. That this was implemented by a Conservative government means nothing, of course, other than that the last shred of content has been stripped from the brand. Well, it’s only fair. Regional development has been such a dazzling success and has delivered such undreamt-of wealth, to say nothing of a revitalized culture of self-reliance and enterprise, to all the regions in which it has been tried that it’s only right that Southern Ontario should finally be given a chance to catch up.

But not all the credit should be lavished on the “Conservatives.” The Toronto Star lauds our indomitable premier Dolton for elbowing his way to the front of the soup line, no mean feat when you think about the competition, those hardened panhandlers from Quebec and Down East who have been doing this for years. The strategy of doing nothing to improve Ontario’s productivity while loudly complaining about the unfair distribution of federal “booty,” as Jacques Parizeau so aptly termed it, is clearly starting to pay off.

The other shoe

2009-01-31T21:58:00.001-05:00

In hindsight it looks like the previous financial upsets – Asia (1997), Russia (1998), Long-Term Capital, the tech bubble (2000) were the early warnings for the current calamity. But what if the present smash-up is itself just a surge on top of an even bigger wave? The root cause of our travails of the moment is the accumulation of too much debt in the private sector. Two years, or even a year ago, it was widely thought that this level of debt was sustainable. The market has now decided that it wasn’t. And however, harsh the correction may seem it is at least taking place. Losses have been incurred- mainly by shareholders – and the capacity of the financial sector has been cut down to size.

Public debt, by contrast, continues on its apparently unstoppable ascent. The US is the main contributor, with projected deficits worth trillions on top of a 10-trillion dollar mountain of debt, but other countries are doing their bit as well; the UK is expected to run a deficit of around £100 billion; Italy’s debt is over 100% of GDP, Japan’s is over 150%. Aging populations, rising health care costs, pension shortfalls are among the structural reasons that make public spending and borrowing likely to increase for decades to come. It is a little bizarre that the sandpile of subprime debt was viewed as too big, but the Himalayas of public debt are a normal part of the landscape.

The problem is that while individuals, corporations, small countries and even the global banking system can eventually run out of credit there seem to be no hard limits to the borrowing capacity of major governments. While this may seem temporarily convenient it is actually a dangerous liability – a international crisis in government debt would be like an asteroid compared to today’s financial H-bomb.

Government is now enjoying reinvigorated credibility as the rock-solid investor of last resort. Investors around the world are dropping everything to grab the life preserver of 0% US T-bills. And of course government debt is solid. Although we were told the same about the banks just a few short years ago.

Questions to think about: Who is going to tell governments that they can’t borrow anymore? And who is the lender of last resort in an international public debt crisis? Or can governments just increase their borrowing indefinitely?

Sick transit in Toronto

2009-01-29T20:27:00.004-05:00

Something must have short-circuited in the collective municipal hind-brain also known as Toronto Council, which, entirely without warning, just voted to study the possibility of fast-tracking something called a relief line (not necessarily a subway, but not necessarily not, either), which would act to relieve downtown congestion in a loop from somewhere around Pape to somewhere around Dundas West on the Bloor-Danforth line via somewhere around Yonge and King streets. Given the North Korean style consensus for light rail as the only transit option which can even be mentioned in public this is a bit of a surprise, kind of like seeing number 4 in the Politburo being abruptly replaced by number 7. We’ll have to wait for Concillologists to decide what it really means. No rush, of course. "Fast-tracking" – if approved – would mean the line would be moved from the 25-year plan to the 15-year plan. Not exactly the way they do things in China, or even Spain (the Madrid subway is over 280 km, much of it added since 2000). Still, it is at least a glimmer of hope for oppressed Toronto commuters.

The standard argument for light rail over mass transit that actually works (subways) is that there is no money available, and subways are incredibly expensive. It may cost as much as 2 or 3 billion dollars for a new subway line. On the other hand, we seem to recall something in the news recently about the federal government planning to splash out $85-100 billion over the next 5 years – including for infrastructure projects that would improve long-term productivity. Imagine that. And that’s money they don’t even have. Maybe it isn’t cash that council is short of but something else . . .

Destruction

2009-01-26T19:05:00.006-05:00

A concise summary in Scotland’s Sunday Herald of the banking disaster that has overtaken the UK. It is kind of the Battle of Britain in reverse, whereby the very unheroic actions of a few bankers and regulators have brought the entire nation to the brink. Churchill’s dictum “Never has so much been owed by so many to so few,” is weirdly apposite today if we are talking financial liabilities.

Anyway, the article, in a short recap, makes the following points:

RBS has seen its market cap collapse from £75b to £4.7b; Barclays is given a 25-40% probability of survival by one analyst.
Basel II capital standards are being ignored in bailout talks; but to the extent they are not they are making things worse.
Partial nationalization may not improve the flow of credit because banks will hoard liquidity to shore up their capital base so they can get out from under government control
Full nationalization may be so expensive that a national default on bonds or a currency crisis may result
Under complicated new accounting standards there may not be an official sign-off of banks’ books this year
Banking IT systems are not good enough to allow a comprehensive analysis of their positions, including hundreds of thousands of complex derivatives
Uncertainty about the entire UK economy casts into doubt the value of assets held by the banks, making their positions even harder to value.

The bottom line: “It simply doesn’t get any more serious than this.”

And as a final note, the UK is one of the three major foreign holders of US Treasuries (alongside China and Japan). A forced sale of these assets could trigger the next avalanche . . .

Charting the bloodbath

2009-01-23T20:40:00.003-05:00

This chart is from Conde Nast Portfolio.com. Click to enlarge. A picture showing how 15 global banks participated in the destruction of of about $1.5 trillion of shareholder value in a year and a half. The medalists are Barclays, Citigroup and RBS, now worth 8%, 7% and 4%, respectively, of their values in mid-2007.

Bell Canada

2009-01-23T18:54:00.003-05:00

Canada’s own corporate League of Morons has had this screen up for about three weeks for Toronto users trying to connect to hotspots via their cell phone accounts (click to enlarge). Missing is the "Connect Now" button which completes the logon process. Users who get this are therefore halfway logged in and can’t connect to any other web page. Despite numerous calls to what claims to be Bell tech support, this simple problem has not been resolved in weeks. Staff were unable to explain the problem except to assert that it had been "escalated," whatever that means. An alternative for hotspots is Boingo, which still uses the Bell network, but at least seems to allow users to log in. It’s also cheaper, at $9.95 per month, versus $25 for Bell’s "unlimited" "access."

If you can't do the time . . .

2009-01-22T21:11:00.005-05:00

In Toronto a plastic bag is now going to cost you a nickel. Oddly, it's the same in Delhi. How do you say draconian in Hindi? But with 18 million people in the city it is clearly time to start to get serious about the environment.

The World is Watching

2009-01-22T20:13:00.004-05:00

Or not. According to the Guardian, Thailand may be responsible for the deaths of hundreds of Burmese and Bangladeshi migrants, who were allegedly towed out to sea in boats with no motors and left for days without water. Thailand denies the allegations. But however the facts turn out, they are unlikely to provoke much of a reaction on the part of the international community. That is, there won't be any UN resolutions, or big demos in European capitals or other expressions of outrage, which by global consensus are reserved for Israel (and, sometimes, the US, although probably not so much for the next little while.). Meanwhile, journalists and international observers in Darfur, Congo, Sri Lanka and Russia spent yet another week playing cards and watching the paint dry...

Unprepared

2009-01-22T19:49:00.004-05:00

The latest projection for a deficit is now $64b over the next two years. This will, according to the five-year plan, be followed by three years of little bite-sized deficits, with a complete return to sobriety in 2015. The possible outcomes are as follows: the recession turns out to be milder than anyone thought, revenues roar ahead and we quickly return to balance and then pay off the loan. Or, events unfold exactly as projected.

Or, things don’t go so well, the recession bites harder than anyone expected, revenues fall faster than anyone expected, more stimulus is required than anyone expected, the auto and forestry sectors require bigger bailouts, oil drops to $10 and Alberta suddenly needs a bailout too, unexpectedly robust inflation in 5 years is met with high central bank interest rates – which in turn drive up interest payments on a half trillion dollars of total debt, or there’s a little currency crisis, etc. But this kind of scenario isn’t really very likely, since our economic weathermen have a pretty reliable forecasting record. For instance, Stephen Harper’s prediction of a few months ago of a balanced budget. Or Ben Bernanke’s warning in 2007 that the subprime crisis could cost as much as $100 billion.

Of course, we could have had a serious debt repayment agenda over the last decade, and paid off maybe one or two hundred billion more than we actually did, instead of ramping up spending at twice the rate of economic growth under Liberals or Conservatives alike. Setting aside reserves for a rainy day. But really, a recession? Who knew?

Inauguration

2009-01-20T21:00:00.003-05:00

Barack Obama’s inauguration today was a ray of sunshine across an otherwise gloomy economic and political landscape. For all its troubles America showed the world an example of the power of democratic renewal. An inspiring coda to the Civil Rights movement, and a final postscript to the Civil War, as well as ringing down the curtain on 8 years of stale mediocrity, this ceremony brought in a promising new president, who shows a determined willingness to come to grips with the nation’s major challenges. A truly historic moment and a hope for better days ahead.

Lessons from the crash

2009-01-17T23:35:00.004-05:00

Lessons from the current mess are proliferating, which is fine, and would be even better if we could agree on which ones are right. Maybe one of the best lines about all this is by investor Jeremy Grantham in an interview with Barron's:

Do you think we will learn anything from all of this turmoil?

We will learn an enormous amount in a very short time, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.

For what it is worth, the view of this site, in a nutshell, is that the root cause of the problem was an excess of debt, which is ultimately an expression of overconfidence on the part of borrowers (and lenders). Since people tend to grow more confident as the length of time since the last crash increases it is fair to suggest that good times contain the seeds of their own demise as the credit balloon gradually expands to the bursting point. The idea that this can be this process can be stopped by regulation – short of the standards in effect in places like North Korea – is a complete mistake, although it may be possible to trade smaller, more frequent bubbles for bigger, lees frequent ones.

Michael Lewis and David Einhorn make a good point about financial institutions which are “too big to fail.”

THERE are other things the Treasury might do when a major financial firm assumed to be “too big to fail” comes knocking, asking for free money. Here’s one: Let it fail.

Not as chaotically as Lehman Brothers was allowed to fail. If a failing firm is deemed “too big” for that honor, then it should be explicitly nationalized, both to limit its effect on other firms and to protect the guts of the system. Its shareholders should be wiped out, and its management replaced. Its valuable parts should be sold off as functioning businesses to the highest bidders — perhaps to some bank that was not swept up in the credit bubble. The rest should be liquidated, in calm markets. Do this and, for everyone except the firms that invented the mess, the pain will likely subside.

This sounds reasonable and certainly couldn’t be worse than the madly-off-in-all-directions portfolio of government responses to date, including variously providing capital directly, nationalizing, buying bad assets, forcing mergers or just allowing collapse.

The other point which this site has long believed and doesn’t mind stating again, is that the principal danger of debt is its nasty habit of getting out of control (a property shared with inflation, as we will see in 3 to 5 years). What seems perfectly manageable when things are going well can suddenly become a crushing burden when circumstances change. This is true for individuals, corporations and governments alike. The latter usually respond by issuing even more debt and then finding things suddenly skidding downhill much faster than anyone expected. This is what happened to Canada in the 90s. For the Americans today, things would be a lot more tolerable if they hadn’t already run up a $10 trillion public tab under the not-so-benign neglect of uncurious George. We may have to borrow and spend for now, but the long run public debt target should probably be zero.

Open the taps

2009-01-17T20:19:00.003-05:00

So the good old days are back. Like the scene in the (otherwise abominable) Cat in the Hat where Alec Baldwin rips off his man-corset and lets it all hang out, Canadians are finally out of that dreadful fiscal truss we’ve been forced to wear for the whole of the last damn decade. Aaaaaaaaaah! Doesn’t that feel good when you can finally let your belly flop out over your beltline again? Gawd, what a relief. We're back to spending money we don't have. And about time, after all, we’ve been starving our cities, our resource sector, our manufacturing base, health care, the universities, small business, infrastructure. Starving them. For so many years. And the provinces. The poor, poor provinces. Fortunately they are represented by a talented and energetic bunch of first ministers, er, whose names we can’t recall at the moment, but no doubt they will use make full use of the current climate of opinioneering to crowbar their fair share out of that skinflint Harper and his greasy, senior-doublecrossing gnome of a sidekick, Flaherty. And it’s all legit. We have to save the economy. Save the economy and ward off the greatest Depression since the Stone Age. This crisis was caused by too much debt, but we’ll solve it with even more. And then we’ll just inflate our way out of that – which is certainly what the Americans are going to do. Relax, Canada. The government is going to write $100 billion in bonds over the next few years to “stimulate” the economy; meanwhile you won’t have to do a thing except sink into the couch and have a beer. Unzip your pants if you feel like it. Back to normality at last.

Dependency Ontario

2008-03-10T23:21:00.003-04:00

The latest in the McGuinty-Flaherty spat illustrates more and more clearly how Ontario is turning into a jursidiction of dependency. The number one concern of the provincial government is evidently how to wring more money out of the Feds. This is the hallmark behaviour of dependent individuals or groups: blaming others and demanding assistance. Is there anything Ontario can do for itself? Of course not. Long-range planning? Forget about it. It’s obvious that nobody needs that when times are good. And when times are tough, like now, well, this is a crisis! We don’t need reform, we need cash. Right away!

It has been apparent for some time that the manufacturing industry in Ontario – and the auto industry in particular – does not exactly have a golden future. It might also have been apparent to those businesses (and the governments that taxed them) that the windfall profits derived from a favourable exchange rate were not going to last forever. Could anything have been done about this? Like maybe booking the unearned part of profits attributable to the weak loonie as a hedge for the day when the relative strengths of our export and domestic currencies were reversed? Or investing in greater efficiency, so as to be able to fight on without the magic shield and armour of a 63-cent dollar? Nah. That’s not the way we do things here.

One of the best examples of arrogant helplessness is illustrated by this quote from the Toronto Star (which, as usual, is on the wrong side of the issue):

Flaherty could have made it much easier for Ontario either to lower its corporate income tax or to harmonize its sales tax with the GST had he transferred to the provinces one percentage point of the GST last fall. Instead, Flaherty simply cut the GST by a percentage point, which did nothing for the competitiveness of Ontario or Canada.

In effect, though, Flaherty has transferred the GST cut to the province – if only the province will pick it up. There is nothing to prevent Dalton the Feckless from raising provincial sales tax by the two percentage points which Flaherty cut. Ontario consumers would then be paying the exact same total sales tax as they were 2 years ago, the province would have more revenue and would be able, for instance, to stimulate industry across the board with corporate tax cuts which would not subtract a penny from our cherished social spending. But the Liberals don’t have the guts to raise the sales tax – they want Flaherty to do it for them. The suggestion that Ontario stand on its own two feet and make its own decisions is then taken as an insult. Of course, there is nothing like the outrage of the dependent when told to shape up. Hence the heated tone of the current tiff.

The one (very) minor mitigating excuse in Dalton’s favour may be the structural inducements to dependency embedded in federal-provincial relations. In fiscal terms the buck really does stop with the feds. They have no senior level of government to run to for a bail-out when times are tough. This may be why they sorted out their finances earlier than the provinces and have in general displayed a greater sense of fiscal realism for about a decade. At the other end, by contrast, the city of Toronto, with two senior levels of government to beg from and blame, is even more given to passivity, fantasy and resentment than the province. Such are the corrosive effects of redistribution.

Have Nots

2008-02-26T22:35:00.004-05:00

According to the Post, Ontario is on the verge of becoming a have-not province. While the official designation may not arrive until later in the year, in terms of its mentality the province may already have crossed the threshold, which can be defined as the point at which the provincial government’s top economic priority ceases to be local growth and instead becomes how to suck more cash out of the national treasury. A former American president once said “The business of America is business.” What a contrast with the business of Quebec, or Newfoundland or Saskatchewan, which is to relentlessly lobby for federal payola. Now Ontario is about to join this ragged bunch, whose business is being dependent. The McGuinty Liberals are notorious for having not a shred of a plan to attract enterprise to or improve productivity in Ontario. They prefer to whine about how they are not getting a fair shake. Mayor Miller in Toronto offers exactly the same on a smaller scale. Why try to cut business taxes and attract corporations downtown when you can just lie on the sidewalk and rattle your cup when Flaherty drives by in his limo?

None of this is to say that the province and city do not have legitimate fiscal issues. Too much tax money is indeed flowing out of both jurisdictions, to the benefit of other parts of the country. But where local leadership – and much of the electorate behind them – go wrong is in putting these grievances first and deferring doing what they can do now. This is the core of a mentality of dependency – waiting around for others to solve your problems. (And besides, the problems of the province or the city are more deeply rooted than just a lack of funds, so more money alone is not going to be the solution). In any case, we now appear to be headed for the ludicrous state in which 80% of Canada’s population receives equalization payments; in the name of fairness. The bigger picture is not inspiring: This country is becoming increasingly dependent on oil for its wealth, its largest city is stagnating and the former manufacturing heartland has decided that the soaring FX rate and the sinking fortunes of GM are just all too much, so it’s going to give up and join the other beggars caterwauling outside Stephen Harper's window. Tar Sands Canada and Dependency Canada. The new two solitudes.

Why they hate us

2008-02-21T15:27:00.003-05:00

Fiscal Sense and Nonsense

2008-01-26T21:14:00.000-05:00

An excellent article by Bill Wilby on the state of the US dollar (from the January 23 Wall Street Journal, and reprinted in the National Post):

Currency debauchment is a choice. Most governments don't want to debauch their currency -- it's just that they don't want to take the actions that might prevent it, because those actions are perceived to be intolerably painful. Thus it was that last fall, the Federal Reserve, the world's central bank, decided to "let the dollar go" because staying the course on interest rates might threaten the world's financial system (or so the argument goes).

Meanwhile oil prices are high, inflation is considerably above the Fed's own stated long-term targets, and the dollar is in danger of losing its reserve currency status. Should we care? Are saving the dollar and saving the global financial system mutually exclusive alternatives? And isn't a dollar decline necessary for "rebalancing" the U.S.'s external deficits? The answer to the first question is a resounding yes, and to the last two questions, resounding nos.

(Emphasis added). The opening paragraph makes the key point. Fiscal integrity is a practice. It means making the right decision every day, not taking the easy way out, not letting things slide. This, of course, is exactly what the Bush administration has failed to do, and is one more part of the mess that will have to be cleaned up by his successor.

Another salient point:

Third, the weaker dollar accelerates the growth of our competitors. China may be growing at 11% or more in yuan terms, but their growth in U.S. dollars in 2007 was greater than 17%, and it is their dollar growth rate that is relevant for the rate of their rise in the world's economic hierarchy. Using Europe as another example, in 2002 U.S. nominal GDP was nearly 10% larger than that of the Eurozone 15. Today it is 14.3% smaller. Although Europe has been growing more slowly, its global economic power has been rising more rapidly than that of the U.S. because of our falling greenback.

And finally:

Sadly, the dimensions of the Fed's great dilemma would be much less acute had the Fed and Treasury officials not taken such a cavalier approach to the U.S. dollar over the past eight years. Our "strong dollar" (wink, wink) policy has never been articulated by either institution with any real conviction, and markets have rightly sensed that maintaining employment, growth and stock-market happiness has begun to take precedence over maintaining the value of money. In a world of fiat currencies, where trust is your most powerful policy tool, dollar strength is a far better indicator as to the appropriate stance of monetary policy than "core" inflation.

But read the whole thing.

Fiscal integrity is one of the pillars of the modern nation state. Its absence is one of the hallmarks of Third World nations, and a major impediment to their development. Broadly speaking, the governments of developed nations have, over the last few decades, learned the lessons of the importance of containing their tendencies to indulge in inflation, deficit spending, excessive taxation and other fiscal vices. But as the decline of the dollar shows opportunities for backsliding abound.

For an example of retrograde economic thinking, there is Conrad Black’s commentary on the state of the US economy. This fairly unremarkable article finishes with the following prescription:

As for Canada, the dollar should be induced downwards to about 95 cents (U.S.), the government should trim the sleeves of the Dickensian straight-jacket of the balanced budgets, and cut taxes with some vigour.

This is bunk. How is dollar to be “induced” to 95 cents? But the real gaffe is asking for the “Dickensian straight-jacket” (or more correctly "straitjacket") to be loosened. There is no way this is right. Governments are debt-aholics, and as for confirmed alcoholics, there is no such thing as “just one little drink.” It’s one, then another, then another. Before you know it you’re eating hamburger off the floor.

Running deficits is the easy way out. If governments want to cut taxes they can go ahead and cut spending. This government certainly could. Federal spending is up 13% in just two years. In fact, the gov doesn’t even have to cut. PMSH could just throttle back on the growth in spending, to say 1% a year (but then watch out for those low-flying pigs). As the economy grew and revenue increased room for tax cuts would naturally increase. But a government which chooses to spend on equalization, on payments to Quebec which are then transformed into provincial tax cuts, on farm subsidies and grants to the auto industry – such an administration needs to take a look at its priorities and ask whether this kind of expenditure is really what it should be doing. It can cut taxes (notably corporate taxes) and strengthen the economic fundamentals. Or it can satisfy the motley mob of screeching mendicants. But weaselling out of uncomfortable choices by running deficits is definitely the wrong option. For about the last decade Canada has shown greater fiscal rectitude than our Bushwhacked neighbours; we can keep it that way by ignoring Uncle Conrad’s well-meaning but mistaken advice.

Junk sociology at the National Post

2008-01-22T19:45:00.000-05:00

The Post has made a hobby in recent years of bashing the promulgators of what it sees as “junk science.” So it is interesting to see how little rigour the editorial board itself displays in matters statistical. The Jan 22 lead editorial, Handgun bans don’t work asserts that:

Luxembourg prohibits private handgun ownership altogether, yet has a murder rate nine times that of Norway, which has one of the highest rates of firearms ownership in all Europe.

A query to the Post produced a reply from the nearly innumerate Lorne Gunter (whose numerical misadventures are also discussed here and here) asserting that the Luxembourg homicide rate is 9 per 100,000, based on a report from the Canadian Centre for Justice Statistics. This is, of course, rubbish. But at least interesting in a sense, as it is wrong in so many ways.

First off, Luxembourg isn’t an example of anything. It’s a dot on the map. It has a population of under half a million. So in terms of comparative international statistics any evidence it has to offer on anything is really closer to anecdote than data.

Second, any figures it did provide on something as relatively rare as homicide would have to be handled with extra caution. For those with a limited feel for things statistical, here is a helpful little hint: Numbers about low rates over small populations are tricky. As an example, it might be surprising to learn that Nova Scotia was recently engulfed by a towering tsunami of crime during which the murder rate went up a shocking 150% in just 2 years. (Translation: 8 people were killed in 2003; 20 in 2005). So, for example, citing a one-year rate for somewhere like Luxembourg doesn’t really mean much. The next year twice as many people could be killed, or half. Which means that a big number could just be a statistical blip.

Third, it is common knowledge that the US has a higher homicide rate than Europe (partly because it has so many more handguns, in fact). It is also fairly well known (at least among people who are up to speed with the news, which presumably includes most journalists) that this rate is around 5 per 100,000. And it is also known that Luxembourg is an untroubled country, one of the wealthiest in Europe, let alone the world, without much of an underclass, and bordered by neighbours like Belgium and the Netherlands. What are the odds of such a place being twice as violent as the US? But apparently this obvious implausibility didn’t raise any eyebrows on the Post’s editorial board.

Finally, the rate of 9 has been challenged as a typo; it is almost certainly 0.9. Wikipedia lists rates of 1.36 and 0.9 for 2001 and 2002, which are in good agreement with the rest of Western Europe (the source is the UN, as footnoted). This error has been acknowledged even by pro-gun advocates, and if the Post’s writer had bothered to get off his fat butt and use Google (oh, wait you don’t even need to get off your fat butt to use Google . . .) he would have discovered this in a minute. Naturally, the false value is still floating around blogs and websites and has doubtless now been given an extra shot in the arm by the Post.

What is wrong, of course, is not the misplaced decimal, which could happen to anybody. It is rather the lack of numerical common sense in citing a one-year number from a tiny country which a moment’s reflection would show to be dubious. And that, to repeat, from a newspaper that has the effrontery to pose as a critic of non-rigorous thinking and “junk science.” That robot in the ad got it right. Dorksticks.

Finally, the editorial also repeats the junk criminology nugget that Britain’s violent crime rate “has soared” since the ban on handguns in that country. This is exactly like the increase in Nova Scotia’s murder rate. The UK’s handgun homicide numbers are so low that any upward change seems big. For the record, Britain has around 45 handgun murders a year. That is fewer than Toronto. The difference is that Britain has a population of 60 million. If Toronto suffered these deaths at the British rate, this city would have just two or three handgun slayings a year. The rate could hardly be lower. Which of course is more evidence that handgun bans really do work.

Flat tax NOW

2008-01-18T19:25:00.000-05:00

The Canadian Taxpayers Federation calls for a flat tax. It is nice to see somebody keeping this issue going. The reasons supporting this proposal by John Williamson and Mark Milke are given as: reduction in administrative complexity; a lower overall rate; a more progressive system because of the elimination of deductions for the wealthy; reduced tax avoidance; and greater incentives to work, save and invest.

To these could be added a decrease in the scope for government to attempt to influence its citizens’ behaviour. Tax incentives to change behaviour often fail. At least as far as the targeted behaviours are concerned; other kinds of behaviour, for example to do with tax avoidance and evasion, may well be stimulated. In addition, they also encourage a mentality that views government as responsible for how people act. If something is truly not in the public interest it can be made illegal. Beyond that, citizens should be left to their own devices.

And then, most tax benefits are not in the general interest, but rather in the political interest of parties catering to key voting blocs. By stopping this kind of electoral bribery a flat tax would introduce a greater measure of honesty into politics. Finally, a flat rate with no deductions would make voters confront the reality that increased public spending requires increased taxation. Those who supported a tax hike would have to feel the pinch themselves, rather than - as we now do - trying to reap the benefits while passing the costs on to others (e.g. the “have” provinces, Alberta, Toronto, corporations or the wealthy, to name a few traditionally favoured targets).

One of the major attraction of a flat tax is that it would help make politics in general, not just the tax system, more transparent and honest. Williamson and Milke don’t emphasize this enough; apart from that they are on the right track.

Time to ban handguns

2008-01-18T18:39:00.000-05:00

In a week, Toronto has had two innocent pedestrians cut down by stray bullets. This is unacceptable and needs to be addressed. One of the critical steps – as correctly advocated by Mayor David Miller – is for a comprehensive and total ban on handguns. While this site is no fan of Hizzonner, who in general is doing a pretty sucky job in the face of the serious problems pressing on the city, in this case he is completely in the right. Handguns must be banned, and it is time for politicians to start taking this issue seriously. The city – and the country – need a consistent, vocal and visible advocate for a handgun ban. If Mayor Miller is to lead the charge, and to force the federal and provincial leadership who prefer to duck this issue to face it squarely - then more power to him.

But ultimately it is also up to citizens to get active: to write their MPs, to organize, to make the issue a notable one in the coming federal election. Canadians who pride themselves on how different we are from our neighbours to the south now have a chance to work to embody in law one of our significant differences: that the large majority in this country want handguns to be banned, without exception.

That being said, however, it is also true that a ban is not enough. Gun lovers often point to the laxness of our criminal laws, including enforcement, as one of the facilitating factors behind crime, and they are correct to do so. They also, however, tend to misleadingly cast law enforcement and gun control as alternatives. This is a false choice. We can have both: a handgun ban and the strict 20, 30 and 40-year mandatory minimum sentences for gun crimes that are needed to remove hardcore criminals from circulation. In fact the combination of a ban together with heavy and effective prison terms for violators would represent the consistent and comprehensive policy this issue needs. Admittedly, Mayor Miller is unlikely to start lobbying for this part of the equation, and one wonders who will, given the lack of interest in this issue among federal of provincial conservatives. But you’ve gotta start somewhere.

The terrible killings of the past week clearly underline how guns are different from other weapons. Unintended victims are rarely, if ever, killed, by stray knives or baseball bats. Guns are uniquely dangerous (just as they are uniquely useless for any purpose other than killing). The threat they present is not mitigated by the enjoyment collectors and target shooters derive from their activities. All the gun collections in Canada and all the target shooting medals are not worth the life of a single person. Time to stop compromising with these minority interests and to get rid of the damn things.

Our culture what's left of it

2008-01-14T18:48:00.000-05:00

You couldn’t write this stuff.

From the Post: Terence Koh, the provocative Canadian darling of the New York art scene, has aroused controversy in Britain after a top gallery displayed one of his sculptures showing Jesus with an erect penis.

Meanwhile, back in Alberta: The [Human Rights and Citizenship Commission] is investigating Mr. Levant's decision two years ago, as publisher of the Western Standard, to print a series of cartoons depicting the Prophet Muhammad.

It is hard to imagine anything better encapsulating the silliness of our cultural elites: celebrating a “transgressive” artist who proudly mocks a target that will not fight back, while undermining basic freedoms through bureaucratic intimidation under the banner of “sensitivity” and anti-racism. It is amusing to imagine how our progressive opinion-makers would howl if the situation were reversed: if Mr Koh had decided to make a pornographic statue of Mohammed and Mr Levant were being interrogated for having offended Christians.

In the spirit of contributing to our wacky politico-artistic milieu, we offer up the following design for an installation: a hot tub full of blood and urine, and sitting in it three life-size figures made out of shit, with plastic red clown noses. Title: Canadian Human Rights Tribunal, 2008 (or, for the UK version: Arts Council Funding Committee).

We don’t actually have the time to physically manufacture this piece, but we are happy to release it to any interested young conceptualist who is willing to do the work. All rights to royalty and intellectual property are hereby waived.

Desperately seeking authenticity

2008-01-14T17:34:00.000-05:00

As if Toronto didn’t have enough problems (growing income inequality, deteriorating schools, the disastrous and ever-expanding legacy of the Harris cuts), it apparently is now also suffering an authenticity shortage. The Toronto Star analyzes the city’s nightlife and finds that the downtown club district offers a mainly artificial experience, featuring “feigned danger, scripted unpredictability.”

As entertainment options in the city become more packaged, the search for an authentic, meaningful experience becomes both more desirable and more rare. As Grazian writes, "The dirty little secret of urban nightlife is that typically nights out are fairly straightforward, unremarkable affairs during which very little out of the ordinary ever happens." Faced with the routinization of fun, some have started to long for the danger and unpredictability that cities once offered.

A May 2007 New York Observer article described how a low crime rate in Manhattan appears to have reduced the city's vitality and edge. Long-time resident Dalton Conley told reporter Lizzy Ratner, "It seems kind of weird to say that one would be nostalgic for times when you were scared to get mugged going out at night and riding the subways was taking your life on your hands. Yet I think there is something that's lost."

(Grazian in the above is University of Pennsylvania sociology prof David Grazian, whose special subject is urban nightlife.)

Anyway, we may not have to lament the complete evaporation of our city’s “vitality and edge.” A passerby was fatally shot outside the Brass Rail strip club near Yonge and Bloor Sts early Saturday morning. Presumably this qualifies as an authentic urban experience – it certainly was for the victim, as well as his family and friends, who will be marked by it for the rest of their lives.

Yonge St has had two fatal shootings of innocent passersby in two years. The Entertainment district has had a number of close calls. We’re not totally Disneyfied yet. Thrill seekers, come on down.

Carbon tax follies

2008-01-11T19:35:00.000-05:00

Terence Corcoran takes aim at the idea of a carbon tax and scores a couple bulls-eyes. In principle, a carbon tax is supposed to lead to all manner of goods things – reduced consumption, smaller cars, less SUVs, less congestion, greater fuel efficiency, less CO2, less revenue for half-crazed and dangerous autocrats like Chavez, Ahmedinejad, Putin and Danny Williams. And it’s true – a heavy carbon tax would accomplish all these things. The only question is how heavy? Corcoran quotes David Frum as supporting a tax of $50 per ton of carbon emissions, which would be equivalent to $6 on a barrel of oil. But with oil at around $100 a barrel already a 6% surcharge is unlikely to affect consumer behaviour. Since 9-11 oil has gone up by around 400%. Nobody seems to be driving or flying any less, although apparently orders for SUVs have taken a bit of a nosedive. In any case, it is readily apparent that consumers are not going to be moved to change without much more potent incentives.

But it is politically impossible for governments to levy gas tax hikes on the order of 100%. Price changes alter behaviour only when they are painful – as were the oil shocks of the 70s, painful but effective, as they led to major improvements in American energy efficiency. Democratic governments, however, are mainly in the business of providing palliative treatment in response to economic shocks, not inflicting more pain. Doubling the price of gas is clearly out of the question, and fractional measures are a pure waste of time. So the whole issue is better left alone.

Furthermore, as Corcoran points out, a voluntary and significant reduction in North American oil consumption would lead to a global price decline, which would just mean that America’s economic competitors, notably China, would be able to roar ahead on cheaper and more plentiful fuel while American industry underwent a difficult restructuring, featuring layoffs, wage cuts and offshoring. To quote:

A huge jump in the price of energy at home would render U.S. production uncompetitive. During a dramatic transition phase, moreover, the pressure on U.S. production and industry would be especially risky. If the U.S. taxes itself off oil, that would lower the global price of oil, giving other countries an even greater economic advantage.

The best oil policy is looking more and more like the simplest: do nothing. The market has already hiked the price of oil by more than any politician would ever dare. Prolonged high (and higher) prices will moderate demand and stimulate the search for alternatives. While the oilogarchs will undoubtedly have their day, in the longer tem their future is not so rosy. They are more vulnerable to an embargo than their customers, their easy wealth inhibits their long-term development and their resources are slow but inexorably shrinking. Those who advocate hunkering down for a “Long War” against Islamic fascism should not be averse to waiting for Saudi or Iranian oil reserves to diminish over the next few decades. The West faced the Soviets for 45 years after the end of the last war and prevailed. On that time scale 2030 or 2040 - when many pundits expect the new energy economy to emerge – are not really that far away.

And then, we will surely be technologically stronger in another three or four decades. Why force a transition to alternative fuels now when oil is still so cheap (relative to future prices) and our technology is so primitive? In the high-tech future with high price oil an alternative energy strategy will evolve naturally from a broader technological base in accord with real instead of artificial incentives.

So, subvert the Saudis. Take the car.

The wild card

2008-01-10T20:31:00.000-05:00

The presidential primaries are the most interesting in years, although there is a decent chance (all the media bellyaching about the length of the process notwithstanding) that the fun will all be over in just 3 more weeks. As usual with these affairs, the candidates are all too human (except Hillary, who appears to have been beamed down from some other galaxy). Herewith: Ron Paul, a loveable no-hoper from the libertarian fringe; Thompson a clapped-out phoney; Huckabee a friendly creationist who wants to abolish the IRS; Rudy the Mad Mayor; Mitt Romney a desperate and flailing triangulator. Then Edwards, a flailing populist; Hillary the Terminator, powered by alien triangulating supercomputers; and Barrack the afternoon TV candidate, long on “hope,” short on ideas and policies, whose supporters don’t seem to mind the idea of yet another inexperienced Prez. Which leaves John McCain – old, white, male, cranky; a politician who’s been to Washington but still has a mind of his own, and isn’t worried about speaking it; and who has the additional advantages of being cranky, old, male and white. In all likelihood too much of a maverick to take the nomination or the election, but what if . . .

Toronto the Poor

2008-01-05T20:38:00.000-05:00

An interesting piece by J. D. Hulchanski at the Centre for Urban and Community Studies at U of T titled "The Three Cities within Toronto: Income polarization among Toronto’s neighbourhoods, 1970-2000." This was cited by John Barber at the Globe (but is available to subscribers only under that paper’s stupid, stultifying lockdown policy).

The gist of the article is that Toronto is evolving into 3 distinct areas (called, rather unimaginatively, Cities 1, 2 and 3). City 1 is a high income area, located mainly around the Yonge subway line, plus Etobicoke and the Beaches. City 3 is a low-income area, sort of the north-west plus Scarborough; and City 2, the middle-income area, is everything else. As a note, the basis for this discussion is relative income. The author compares Statistics Canada data on income by census tract to the census metropolitan area average (CMA) income. The CMA is not defined in the paper, but is approximately the Greater Toronto area, in particular including the city and 905. In 1970 Toronto used to be predominantly middle income but by 2000 had polarized into a relatively small wealthy stratum and a large poor stratum, with the middle section significantly reduced in size. The author defines a very high income group as those making more than 140% of the average, a middle income group earning between 120% and 80% of the average and a low income group under 80% of the average. From 1970 to 2000 the very high income group went from 7 to 13% of the population; the middle group decline from 66 to 32, and the low income group grew from 19 to 50. So the middle class of Toronto has shrunk markedly and the poor have grown in numbers. Not a good sign.

One of the obvious questions this raises, however, is did the Toronto middle class just move out - to the 905, for example? The author claims the answer is no but his reasoning seems a little dubious. He argues that in the 905 the middle income group also declined, stating that “Neighbourhoods with incomes near the CMA average are far less numerous in 2000 than in 1970 in both the city and the outer suburbs, although the decline is more pronounced in the city. The overall trends are the same.” This is in fact contradicted by the author’s own statistics in Figures 1 and 2 of the pdf. In Toronto the middle income group declined from 66 to 32 per cent. In the 905 the numbers are 86 and 68, a much more modest decline. Further, there are far fewer low-income people in 905 than in Toronto; only 13% in 2000, up from basically 0 in 1970. Indeed, part of this decline is probably just because big gains among high income earners may have dragged the average income up, causing some middle income people to fall behind – but only in relative terms: in real terms they may actually have moved ahead, just not as fast as the average. The bottom line is that the figures for the 905 actually make income distribution seem pretty static since 1970, which is clearly not at all the case in Toronto.

The other point to bear in mind is that in 1970 there wasn’t much of a 905. The modest shrinkage in proportional terms of the middle income group over this period actually represents an absolute increase of something probably on the order of a million new middle-income earners. It’s impossible to say without the data, but this would certainly leave lots of room for a large migration from Toronto to the outer suburbs over and above the immigrants to 905 who arrived from the rest of Ontario, Canada or the world. Meanwhile the author also points out that the lower-income groups in Toronto are increasingly made up of immigrants and people of color – but most of these people weren’t there in 1970. The picture that this suggests is that relative income in Toronto is going down in part because of an influx of low-skill immigrants (immigrants here meaning arrivals from anywhere outside of Toronto), while at least some of the city’s middle class left for the growing (and income-distributionally stable) 905.

The question this all addresses is whether income inequality progressing all over the CMA, or whether it is just that Toronto is encountering problems. The answer – which is relevant for a range of public policies – seems to be the latter.

Unfortunately the author doesn’t discuss in any depth the possible causes of the changes he documents. The list of proposed remedies, however, is the usual leftie policy pap:

The polarization of the city need not continue. It is not inevitable. The jurisdiction and financial capacity of the federal and provincial government are sufficient to reverse the trend. A wealthy nation can use its resources to make a difference. Income support programs that keep up with inflation and are based on the cost of living and tax relief for households in the bottom fifth of the income scale can address inequality. Assistance with the most expensive budget item, housing, through social housing and rent supplement programs (which exist in most Western nations), will allow more of a household’s meagre monthly income to be available for other essentials. The provincial and municipal governments could implement specific policies to help maintain and promote mixed neighbourhoods. These include inclusionary zoning, whereby any medium-to-large residential developments must include 15% or 20% rental and affordable units. Also, the Province of Ontario could keep its promise to end vacancy decontrol – the right of landlords to charge whatever they wish for a rental unit when a tenant moves − and thereby prevent the displacement of low-income residents in gentrifying areas. The segregation of the city by socio-economic status need not continue. It can be slowed and reversed.

In fact, it is questionable whether such “solutions” will not actually make things worse. As social support becomes more generous, Toronto may become even more of a magnet for low-income people. Typically, also, there is nothing in the above about strengthening the local economy – for which one essential central plank would be lowering business taxes and, in general, trying to make the city a place attractive to business rather than taxing it to the limit.

For the last two decades, Toronto has heavily favoured left-wing politics, by consistently electing left-wing Liberals or New Democrats, as well as a socialist city council. The priorities of this coalition are heavily weighted in favour of redistribution as opposed to economic vitality, as well as laissez faire immigration without regard to what skills new Canadians are actually bringing to the country. The disappointing results of these political choices are now apparent. As the deterioration of the urban economy continues – a decline which is masked by the continued presence of a productive minority whose efforts serve to partially conceal the sinking earning power of most of the work force in aggregate statistics – the city is falling into the danger of being sucked into a downward spiral of increasing poverty, increasing social supports, increasing business taxes and increasing dependency on senior levels of government, as well as growth in a low-income population whose first political priority is to vote for more benefits for themselves. For an example of how badly things can go wrong there is a very good article in City Journal analysing why the decline of Buffalo is probably irreversible (Can Buffalo Ever Come Back? ). Toronto is not the same, and not as bad – yet – but there are some interesting lessons to be learned.

Analysing income distribution is valuable work - and Hulchanski's article should be recommended to anyone who cares about Toronto issues. But it would be really useful if it acted as a wake-up call about the health of the urban economy, instead of sounding the clarion for yet more government spending.

The Pickton mess

2007-12-10T20:48:00.000-05:00

45 weeks and $100 million. Or maybe $200 million. Typically, no one even seems to know what this trial cost. But then out of control costs and fuzzy accounting are the Siamese twins of unaccountability. Add the investigations costs, the appeal costs and another trial for the remaining 20 (alleged) victims – or maybe two trials, as some commentators have suggested that the legal system might not be able to cope with the full number and might have to break the total down into more manageable parts. Plus future incarceration costs. The whole business could cost over half a billion by the time all is said and done.

And the outcome? A trial for 6 victims, but possibly not for the next cohort, for whom the evidence is reportedly weaker. If the strongest cases produced only second-degree convictions that what will the weaker ones deliver? Involuntary manslaughter? And how were those second-degree convictions possible in the first place? How did a killer who showed a systematic and repeated pattern of murder avoid conviction of deliberate and pre-meditated intent? And what did the jury mean with its questions about the possibility of Pickton not being the actual killer, but just a “participant?” Who, then, are the “real killers?” The ones who killed Nicole Brown and Ron Goldman?

And it just wouldn’t be a Canadian trial without publications bans (here and here), although they did hold off on putting the whole thing under wraps.

So: a long and costly trial, an imperfect verdict on a partial case, the suspicion of the existence of other participants who have not even been identified, a decent likelihood of the remainder of the case never going to trial because the legal apparatus would find it too burdensome to process. How much more dysfunctional can our system get before it ceases to function at all?

Scary stuff

2007-12-09T16:21:00.000-05:00

A great column by William Watson in the Post the other day. Watson is a consistent advocate for capitalism and his unCanadian columns are always worth reading. Here he quotes three American academics to the effect that what countries really need to do to develop their economies is to embrace free enterprise. In particular this means giving up “industrial policy” aimed at creating “national champions.”

[The authors] argue that the key to the U.S. productivity revolution of the last 25 years was not information technology, but rather "the forces behind the IT revolution," namely "innovative entrepreneurial companies" such as Intel, Microsoft, eBay, Google, Wal-Mart, Federal Express, Amazon, Dell and so on. Most of these now-dominant companies simply didn't exist 40 years ago . . . [T]his ability to create new firms is now the United States' main competitive advantage. "The continuing emergence and growth of innovative companies stands in stark contrast to the dominance of large firms and unions in the United States in the decades immediately after the end of World War II, and also to the continuing dominance of large firms in Western Europe and Japan."

And, they could have added, "Canada," for the view in some parts of our business community is that big, established, deep-pocketed and protected firms are what we need to succeed in the world.

In Sweden, according to this, "None of top 50 companies on the Stockholm stock exchange has been started since 1970." There's something for fans of the "Swedish model" to chew on (although, then again, they probably regard that as a positive, since it accords with the number one progressive economic value: stagnation).

Watson's article goes on to advocate simplified tax and regulatory regimes and inveighs against protectionism. It is probably good for Canadians to be exposed from time to time to such alien forms of thinking, although it is unlikely to have much effect anytime soon. A related point Watson doesn't touch on is the oligolopolistic domination of many of our key industries. We've got the big 5 banks, Air Canada, ManuLife, Bell, Rogers, the CRTC, the CBC, the Wheat Board (and that is to say nothing of the vast preserves of health and education). Even an insignificant industry like book retail is protected. At least we're allowed a choice of coffeeshops (and, astonishing as it may seem, local hero Tim Horton's seems to be thriving anyway). The US, by contrast, doesn't seem to mind Canadians owning American banks; and they freely allow companies like RIM to become dominant players in their market, instead of protecting such "strategic" sectors as hand-held communications doohickeys.

Canada's political culture is unfortunately generally predisposed against entrepreneurship, capitalism, commercial success, wealth generation, unregulated activity, innovation and change. We pay a substantial economic price for this stodgy, suspicious conservatism (which, bizarrely, thinks of itself as "progressive"). Since we also tend to define ourselves in opposition to the US, we are a long way from getting around the mental roadblocks we have put between ourselves and greater prosperity.

The Law

2007-12-02T14:53:00.000-05:00

Forget Schreiber. Can we extradite the Supreme Court? Jeffrey Simpson sounds off on the real scandal underlying the Schreiber affair. Here is the leading clip from the column, which pretty well sums up the whole thing:

Karlheinz Schreiber spent most of his life in Germany, but he quickly learned to survive in Canada. He learned, as many others have, how easy it is to mock our court system, make fools of judges, take advantage of our beloved Charter of Rights and Freedoms and, by virtue of deep pockets and persistent lawyers, make Canada's legal system look like a modern version of Charles Dickens's Bleak House.

Schreiber has been playing the legal system for about 8 years, deferring extradition to Germany on the strength of one appeal after another. This – and not his petty dealings with Mulroney – is the problem which needs to be investigated, not so much for its importance as such but because it epitomizes how broken our legal system is.

Immigration and criminal trials can be expected to drag out for years. The Pickton trial, for example, now in its 45th week, threatened to choke the judicial apparatus. In order to make it manageable the prosecution pressed charges in the case of only 6 victims. There are another 20 victims whose cases may never go to trial because of the complexity of the case. In effect, for these victims, the justice system may simply give up and turn a blind eye to murder.

Post reporter Brian Hutchison makes a further point:

Like Dave Pickton, who seemed a likely source of information about the accused, and about the sordid goings-on at the farm, Ms. Taylor was not called to testify. One can imagine why the Crown did not want her, or Dave. The pair could not have been involved in the six alleged murders, because, goes the prosecution's theory, Mr. Pickton acted alone. No one else knew.

After all this time and effort, that still seems hard to accept. More likely, Willie Pickton is one player in a larger story. But the jury now goes to work with what it has been given.

In other words the prosecution may have deliberately oversimplified the case – to avoid serving up something too big for the system to be able to digest.

Meanwhile in legal news not involving shady German operatives or allegedly homicidal pig-farmers, it has been decreed that the United States cannot be viewed as a safe country for refugees and that Canada’s safe third country agreement with the US – which means that refugees from elsewhere who are already in the US cannot make a claim in Canada – is incompatible with the Charter and hence invalid.

The US takes in more refugees than any country in the world, and most of those who seek refuge there have little to complain about; but that isn’t good enough for our activist judges. Then there is the Ronald Allen Smith case, where the government decided not to seek clemency for the convicted double murderer, who is the only Canadian on death row in the US. This was declared by liberals to be an insult to Canadian values, an argument buttressed by the Supreme Court ruling of a few years back that capital punishment was incompatible with the Charter. What nobody mentioned was that this decision itself was nothing but the unilateral expression of the prejudices of the legal profession, whose members – unlike the public at large – are overwhelmingly opposed to the death penalty.

The problem with the Charter is that while it has allowed the judiciary to successfully check the powers of politicians, there seems to be little to check the powers of judges themselves, who can declare rights by fiat or tear up international treaties on a whim. Prior to the Charter judges were constrained by precedent. Today the definition of rights is shaped much more by the current political prejudices of a small legal clique. In the US there is a broader variety of juridical philosophies, as well as the strain of strict constructionism, which promotes minimal interference in politics. In Canada there is no similar tradition – judges can be as activist as they want to be.

Lengthy arguments, endless procedural delays, unlimited appeals, continuous invention of new Charter rights. The legal system is dysfunctional and getting worse (and that is leaving aside the continent-sized quagmire of land claims law, in which it looks like we will be bogged down for centuries to come without any definite or final resolution). Maybe it is time to start thinking about some checks and balances for the legal system itself.

The Prophet

2007-11-05T23:29:00.000-05:00

On the Recent Publication of Kahlil Gibran's Collected Works.

A nice review (which only misses the question of whether KG is worse than Ayn Rand).

The mind of a civil servant

2007-10-21T23:07:00.000-04:00

“Canada lax in pursuing offenders abroad,” says the Star. Front page, in fact. To which the obvious rejoinder would be: “Canada lax in pursuing offenders at home.” But we don’t like to talk about that here at the Star; it makes us sound like angry middle-aged white Prime Ministers . . . Anyway, the article is about Canada’s failure to prosecute Canadian paedophiles who operate outside the country. It makes the point that in the last 10 years police have secured only one conviction in this field, which is a little shocking – almost as shocking as reading the Star complain about law enforcement taking it too easy. What’s more, the words “therapy,” “rehabilitation” or “counselling” don’t appear anywhere in the article. Looks like the editorial software has a glitch.

But the best part comes at the end.

Since 1997, 110 Canadians have been charged with child molestation overseas, says Carole Morency, acting general counsel responsible for child sex exploitation issues at the federal justice department.

"I hear the criticism that there's only one conviction, that it's so ineffective," Morency says. "We wouldn't agree. One conviction points to the fact that it can and does work. It shows that ultimately if they engage in these acts they will be held accountable."

So is the system broken? Not at all. If we had 110 charges overseas and zero Canadian convictions, well, that might – and we emphasize “might,” and, besides, it’s a hypothetical question – anyway, zero convictions might indicate that the system wasn’t working properly, all things considered. But in fact there was one (1) full conviction, so the process, clearly does, ultimately produce results, and those who engage in these acts will in the end be held accountable - a full 0.9% of the time.

How the IMF wrecked Myanmar

2007-10-16T23:09:00.000-04:00

Too late for Naomi's book, sadly. This interesting backgrounder on the Myanmar economy appeared about 6 weeks ago on Asia Times Online. The recent upheavals in that impoverished state were triggered by fuel price rises, or to be more precise, the end of fuel price subsidies. These price hikes were no doubt a huge shock to the locals. Transit costs in Yangon (formerly Rangoon, for colonialist nostalgia buffs) doubled overnight; for low-wage workers the new costs may be as much as three-quarters of daily income. Food prices, which also reflect transport costs, have also jumped – by multiples of 10% So its understandable that “the people” were a little miffed.

And what nefarious forces are behind the end to subsidies which the working poor rely on? why, of course, it was "International Monetary Fund (IMF) and World Bank officials, who have long pressed the junta to reduce or abolish a range of price subsidies."

Its a shock doctrine classic. Of course, a little further reading reveals some interesting details.

Some economic analysts have speculated that the SPDC rolled back fuel-price subsidies because it is strapped for cash. In particular, the analysts believe the massive expenditure associated with building the new capital at Naypyidaw, some 400 kilometers north of Yangon, has depleted the national coffers. The government is also reportedly building a massive new Internet and communications-technology center known as Yadanapon Cyber City near the newly built capital.

In view of all the protest footage that went out over the Internet, they may be rethinking that last part. There is also major spending on new dams and a nuclear reactor.

Furthermore:

Ironically, perhaps, the junta had recently attempted to improve the national finances through better tax collection. The IMF and World Bank had warned the regime this time last year that if it did not reduce its high budget deficits - which it has traditionally covered by rolling the monetary presses, sparking inflation - the economy would suffer.

In other words, all the usual suspects: overspending, deficits, inflation, subsidies. And the usual outcome: the system chugs along for a while in its miserable way and then it blows a gasket. And the usual lessons – including that deficits and inflation can’t go on for ever, and that the resentment provoked by the (inevitable) termination of subsidies is always greater than the gratitude occasioned by their introduction.

With regard to national differences, it is worth noting that although Myanmar is on the other side of the world, and culturally very different from Canada, their fiscal bad habits are exactly the same as ours. From the point of view of financial mismanagement, if the generals traded places with David Miller probably nobody would notice. And in contrast to the global varieties of food and folk dances, the kinds of fiscal misbehaviour are always the same stereotypical few, which turn up with depressing regularity almost everywhere.

With regard to the IMF, it is pretty improbable that the government would plunge the country into political boiling water on just their say-so; much more likely that it finally got squeezed by its own overspending. But that won’t stop the anti-glob mob from filing it as another “shock doctrine” case study.

On a roll

2007-10-14T01:40:00.000-04:00

Scott Stinson’s “Dear Diary” feature in the National Post is worth following. In the latest, he imagines Stephen Harper skewering Stephane Dion with prank phone calls. Very funny.

Unless you’re a Liberal. The disturbing fact is that Dion appears to be in the early stages of a reputational death spiral. Once image is the issue, the leader is in trouble. The more he tries to fix it, the more the media senses that he’s losing his grip, and the more interested they get in the image problem, the bigger it gets. Then internal rivals start to smell blood, and then the question of party unity comes up, which, of course, can’t be confronted directly because that only makes everything worse . . . Anyway, Dion needs to get the media to focus on a subject other than Dion, which appears to be becoming increasingly difficult.

The PM, by contrast, is in excellent shape and seems to be getting stronger by the week. The latest move: straight-arming the Liberals with the prospective Manley Report on Afghanistan, which prompted one columnist to refer to the PM as an "evil genius." One of the interesting things about being on the upward path is that your defects cease to matter – in fact, they may even become assets. Is the guy a cold fish? A control freak? The media would be all over Harper for these shortcomings if his stock were sinking. But in fact he’s moving up. So he looks statuesque, decisive, the man in charge. Remote from the media? Not a problem. As Stinson has it: “Eventually [the media] are happy if you even burp in their direction.” When you’re doing well, you can get away with just about anything; when you’re losing everything you do is wrong.

Of course, the PM still has problems – principally the fact that Canadians just aren’t conservative. Support is stuck around 35% because that’s just all the conservatives there are. (And in some parts its a lot less; recent polls from the provincial indicated that in Toronto John Tory’s Progressive-Not-Conservatives stalled at 24%; and in the dependent and overrepresented hinterland of Northern Ontario it was Libs 40%, NDP 40% and Progressive Thingies just 12%). And while we’re on the subject, post-election bleatings by out-of-touch scribblers like Terence Corcoran, as well as various echoing bloggers, to the effect that moderate conservatism doesn’t work are seriously mistaken. A fiscally conservative party wouldn’t win a seat.

Former Conservative strategist Tom Flanagan recognizes this. And so does the PM. But he has made the best of a difficult situation, and the old line about Harper playing chess while everyone else is playing checkers is making more sense all the time. Harper has racked up some fairly impressive political accomplishments in quite a short space of time: he has unified the party and led it to a minority, carried out his short list of election priorities, taken softwood lumber off the main stage, made some inroads into Quebec and presided over a healthy economy and a rising currency, He has avoided being identified with George Bush, and has largely stayed out of trouble on the difficult issues of equalization, Kyoto and Afghanistan. Equally important, although less widely appreciated, he hasn’t committed any blunders (well, maybe apart from the embarassment of the income trusts promise), has kept the caucus under control and so far hasn’t had to climb down on anything. Not as easy as it looks – as Messrs Dion, Duceppe, Ignatieff and Tory would doubtless acknowledge. He looks prime ministerial, and the longer he goes continues this way the more comfortable Canadians will get with him.

Having said that, he has also ticked off the fiscally conservative part of his base with a combination of misdirected tax cuts – the GST and the “targeted” tax subsidies for voting groups supposedly of tactical importance – together with a relative indifference to broader tax cuts and overall fiscal reform. The pragmatic counter to this, a la Flanagan, is that the government just doesn’t have a mandate for anything other than incrementalism (and fiscal conservatives – who are probably outnumbered by regular users of food banks – don’t have anywhere else to go anyway). And there is certainly a logic to this. But eventually, if a majority government is elected, the big picture agenda will have to be dealt with. Although Canada needs broad tax cuts and overall fiscal reform, there isn’t a mandate for this now, and there probably won’t be in the future. Harper will not be able to run on a platform promising anything more than a couple spoonfuls of fiscal cod liver oil, and given a majority he won’t be able to ram it down the voters throats without destroying the party’s prospects for decades to come. The issue of the hidden agenda is not dead – it’s just asleep. Which means that, contrary to what we hear from pundits about “elected dictatorships,” the next Conservative majority will not be on a much longer leash than it is now.

So is implementing a conservative agenda impossible? Well, politicians can do some amazing things. British public opinion was strongly set against going in to Iraq. Tony Blair sent them in anyway, and then won the next election. Bill Clinton, a Democrat, resisted the pressure to spend and actually ran budget surpluses. There is a global current in favour of free markets, free trade and lower taxes, which enterprising leaders may be able to ride. Stephen Harper is a far-sighted and skilled politician, who, we believe, and unlike his predecessor, did not come to Ottawa just for the sake of sitting in Ottawa. He may yet be able to move this country in the direction of open markets, greater prosperity and (somewhat) less dependence on the state.

How many?

2007-10-09T00:47:00.000-04:00

The Star reports that 905,000 people visited food banks in the GTA last year. This prompted comments by Mark Steyn and Kathy Shaidle to the effect that this shows that there isn’t much poverty out there, and, they go on to add, much of what there is is the result of bad choices on the part of the poor. Leaving aside the more complex and controversial second half of these comments, what does the above statistic say about the frequency of poverty?

According to this, the GTA has a population of about 5.4 million (based on 2003 numbers, so by now it's probably more). At 3 meals per person per day that makes an impressive total of 5.9 billion meals per year. Quite a lot of food. At a minimum, a food bank “visit” must equal at least one person-meal, which would make 905,000 meals per year, or 0.015% of all the GTA meals. If a visit meant a parent stocking up for a family of 4 for the weekend, it might represent as much as 24 meals. But such cases are probably a minority of visits. But allowing for multiple people and multiple days, if a visit were to represent on average 10 meals, the total number of food bank meals would still amount to only 0.15% of all meals; in turn 99.85% of meals in the GTA would not come from the food bank.

Many people, however, may have distorted ideas about how common food bank use really is. For example, a Steyn reader comments:

So that would imply that about 1 in 6 people in the Greater Toronto Area visited a food bank in the past year. Is that so hard to imagine?

It is. This could only happen if total visits were spread out over the absolute maximum possible population, that is if 905,000 distinct individuals visited a food bank exactly once in the last year and not a single person visited even twice, which is obviously highly unlikely. Based on the 80-20 rule, which is a great rule of thumb when you don’t know what you’re talking about (but actually does work surprisingly often) – 80% of food bank visits would come from just 20% of the food-bank using population. That would leave just 181,000 visits (meaning possibly as little as 0.003% of all GTA meals) from outside of the hard-core group.

It would be interesting to see a little more research into this. Anti-poverty groups, however, and possibly also the Toronto Star, might not be too keen to see the results if the numbers indicate, as they seem to, that food bank use is less common than many people assume.

Four more years

2007-10-08T16:51:00.000-04:00

of Dalton. Steady as she drifts. Ontario manufacturing will probably continue to trend downward, but job creation elsewhere will balance the losses. Health care costs, now 46% of the provincial budget, will pass the symbolic 50% level by the end of the mandate. Reform of health-care delivery will be put off, Toronto’s finances will continue their gentle downward spiral, power generation will be left alone until it gets so serious that something has to be done, educational standards will continue to move sideways, Caledonia will get worse. Alberta and BC will move ahead while the “Old Canada” of Ontario and Quebec muddles along. In fact, the last 20 years in Quebec - high taxes and low growth, and the cession of economic and cultural primacy from Montreal to Toronto, which passed without a whimper – are probably a good model for the next 10 in Ontario. There is a sizable constituency in both provinces quite prepared to live with managed stagnation – the one thing Dalton can reliably promise to deliver.

Lorne Gunter gets it wrong

2007-10-01T23:44:00.000-04:00

The Post’s bad robot blunders into the issue of surpluses and debt reduction, with the usual results. Dr Gunter, who displays an inaccurate command of the facts over an impressively wide range of topics, wastes no time in getting it wrong:

Admittedly, unlike the Liberals before them -- who used surpluses to rain money on swing ridings and favoured special interest groups -- the Conservatives have used the two surpluses they have managed to pay down the national debt, which now stands at about $470-billion.

And,

[E]ven if the federal government can manage surpluses in perpetuity to equal last year's $14.2-billion whopper, it will still take more than 30 years to eliminate our national obligation. But at least that is better than the Liberals' plan of $3-billion annually, which would have taken 150 years.

In fact, federal debt peaked at $562.9b in 1996-97 and was down to $499.9b by the end of 2004-05, which means that the Liberals, even after their usual wheel-greasing (as well as the buckets of cash used in the sponsorship scandal) were still able to shave a respectable $63b off the national mortgage. That amounts to about $8b a year. It is therefore a distortion to imply that their plan was to spend only $3b a year; that was the plan before including year-end surpluses. The Libs would then mop up the excess and drop it on the national debt – which is exactly what the Tories are doing now.

Then there is Gunter’s claim that "Overspending, not undertaxing created our debt." This is plain dumb. It’s like arguing about whether the Blue Jays are behind the Yankees because they lost more games or because they didn’t win as many. A deficit is a relative quantity – its the gap between income and expenditure; it doesn’t depend on the absolute size of either. So, for example, big-government Sweden runs balanced budgets, while the Americans are coming up short every year.

And as a note on the surplus – it generates more debate than an accounting fiction deserves. What counts is our total economic position. You can create a surplus by shifting money from one accounting period to the next. An individual, for example, could just borrow all of next year’s living expenses right now. Then next year he wouldn’t have to spend a cent, and would enjoy a comfortable budgetary surplus. But on a net basis – which is what counts – he would be flat. Some people think the federal surplus is too big. Well, we could cut it in half by just issuing a budget every six months instead of annually. Problem solved.

Of course, what is independent of short-term accounting is our net position – which is currently hundreds of billions of dollars under water. Moderate reduction in our total debt is therefore perfectly sensible. It would be better if the government committed itself upfront to spending, say, $15b on debt reduction every year (an idea which Gunter also supports), rather than rounding up whatever is left at the end of the year – but as long as debt is being repaid it doesn’t matter much either way. Although paying up front would have the advantage of resulting in smaller surpluses, which might mean that we wouldn’t have to suffer through this debate every year.

Gunter, however, prefers to keep things complicated and so drags in the matter of a spending cut. But this is an entirely separate issue. In particular, the size of such a cut (and concomitant tax cut) should be determined on its own merits – that is, if we’re spending $5b too much then we should cut by that amount; if its $35b then by that amount. But there is no reason for cutting spending by $15b just because that happens to be the amount left over at the end of the year – and even less so when debt reduction, which has not been budgeted for beforehand, already has a reasonable claim on this amount.

Bottom line: we ought to spend the $15b on debt reduction, this year and every year. If there is going to be a debate about spending cuts that should be a separate issue with its own debate.

Interestingly, Gunter glosses over the inconvenient political fact that the government has a pretty comfortable mandate to continue debt reduction on its current moderate course, whereas Harper & Flaherty introducing spending cuts would be something entirely different. And he doesn’t bother to suggest what, exactly, these spending cuts would look like. Less for equalization, maybe? Or native programs, or Quebec agricultural supports? And it's certainly not the time to cut military spending, and not border security, either, what with the Americans in such a nervous mood. Gee, this is harder than I thought . . .

Jobs, jobs, jobs

2007-09-30T15:42:00.000-04:00

While politicians bloviate about educational diversity, integration and separation, and while democratic reformers fulminate about the enormities of first-past-the-post – in the meantime the manufacturing economy in Ontario is quietly sinking into quicksand. Well, it’s not as though everybody has missed the issue. If the major parties drop the ball you can always expect the NDP to pick it up – and start running in the wrong direction. So there’s Howard Hampton proposing to create a Jobs Commissar, er, sorry, that’s Commissioner, whose role will be to protect jobs by asking companies not to fire anybody. Will these bozos ever understand how a free-market works? The other prong is to subsidize the auto industry. Excellent.

The jobs crunch is due to the global restructuring of manufacturing, the high dollar and a slowdown in US consumer demand. The last of these is cyclical and just a part of economic life; these things happen from time to time. With regard to the dollar, Canadian manufacturers have been coasting on a low dollar for years. They could have reserved part of their earnings as windfall profits and used them to improve productivity, but most appear not to have chosen this route. Now the day has finally come where the loonie has risen and the greenback sunk. Complacent managers (and unions) who weren’t prepared for it now have to deal with the painful reality. Changes due to globalization – including the weakening position of American car makers – have been going on for years and are well-known; that they should eventually have real, local consequences should not exactly be a surprise to anyone.

Its not clear what, if anything, can be done to prop up the manufacturing sector as such – and in terms of the big picture it doesn’t matter all that much anyway: what counts is the overall strength of the economy. But lost jobs should act as a reminder that we live in a changing, global environment and that we need to be proactive if we wish to preserve our prosperity. Ontario needs to be made a more attractive place to invest in. This doesn’t mean subsidies or targeted tax cuts or getting the Bank of Canada to try to jiggle the exchange rate, but rather basic, across-the-board reform of the fundamentals. First and foremost this should mean cutting corporate taxes. If a little turmoil in the labour market could concentrate our leaders minds on real economic reform it might end up doing some good after all.

Hypocrites

2007-09-29T22:01:00.000-04:00

It’s not fair!

All we know with certainty is that some votes count for less than others -- a lot less. When 2.6 million federal NDP votes equal 19 seats, as in 2006, but 1.6 million Bloc votes equal 51 seats, it means that each Bloc vote was worth more than four NDP votes.

Thus a leading advocate of MMP hammering away on what is, admittedly, a valid point. Unfortunately this outrage at injustice is nowhere to be found when it comes to the well-known inequality between electoral regions. Is it fair, for example, that Metro Toronto gets 23 MPs and the Atlantic Provinces 32, when both have the same population of 2.5 million? Ok, the ratio of voting power in this instance is only 1.5 to 1 instead of 4 to 1. But the Bloc-NDP comparison is the pathological exception. The distortions of first-past-the-post versus PR are not usually as severe. On the other hand, if you cherry-picked a million voters from the most and least densely populated electoral districts in the whole country, the ratio of voting power would certainly be quite a bit worse than the comparison between T-dot and Down East. The differences in size in ridings in Ontario are also considerable: Brampton West, for example, is well over twice the size of the average riding in Northern Ontario.

So why are the partisans of electoral equality so loud when it comes to the differences between parties and so quiet on the differences between overpopulated (urban) and underpopulated (rural) areas? The latter issue is simply never raised in polite political company, and for all the sound and fury that Ontario’s MMP tempest has stirred up in the teapot, is never mentioned even in passing – even though the underlying principle is exactly the same.

The view of this site is simply that the partisans of MMP are hypocrites. If they believe that a vote is a vote is a vote, then they should be banging the drum for having all ridings the same size. On the other hand, if they are prepared – as they are - to pass over in silence the gross distortions between ridings, then why should anyone listen to their bleatings about the differences in voting power between supporters of different parties?

There may be a case for electoral reform, but if it is to be made it should be made in a principled way, which the current campaign is certainly not doing. In fact, switching to MMP would basically cement into place the regional inequalities in the electoral system, since the idea of yet another round of tinkering would be a complete non-starter.

No urban voter in his or her right mind should support the betrayal of legitimate urban electoral interests that this snake oil proposal will entrench. If there is to be reform, let it be comprehensive and balanced, and not a scam to reward minority parties and stiff the cities. Mercifully, by all appearances MMP is going to go down in flames. Deservedly so. Help hammer a nail in the coffin by voting No on October 10.

Education and Diversity

2007-09-29T20:10:00.000-04:00

So the polls are auguring the wreck of the good ship John Tory on the sandbar of separate schools. For someone with as much experience in both business and politics as JT it must be galling to have to learn at this stage in the game the elementary political lesson that sleeping dogs should be left in peace. And this after having run what is otherwise a textbook example of a “moderate” conservative campaign (i.e. not conservative at all), including a centrist big-spending economic plan almost indistinguishable from the government’s and scrupulously avoiding being associated with Mike Harris or Stephen Harper, or, in fact, any other conservative person or principle, as well as actively reaching out (too far, apparently) to minority groups. And on top of that to face an uncharismatic incumbent, hobbled by his own record as a promise-breaker (itself the result of a political blunder in the last campaign) - and still to lose, will be a nauseating result. A defeat in the election may effectively mark the end of Tory’s political career. This would be an undeserved outcome. Then again, politics is a brutal game.

In logic, the PC educational policy is quite defensible. There is no reason that Catholics alone should be offered a privileged position in the educational system. If it is fair for them to have separate schools, then it should be so for every other minority. In terms of practical politics, however, smoothing over this imperfection is just not worth the political capital it would cost.

The issue does, however, cast light on some of the contradictions – if not outright hypocrisy – of the multi-culti crowd. The always right-on George Jonas made this point a few weeks ago in the Post:

Needless to say, the Liberal government's primary goal is to win the October election in Ontario. Reconciling diversity with harmony is secondary at best -- and I suggest it isn't even secondary. For all the lip-service contemporary governments pay to diversity, they don't like diversity at all. They hope to eliminate, or at least to de-fang it. How? Paradoxically, through multiculturalism.

Few things would promote genuine diversity in Ontario more than encouraging people of various faiths and ethnicities to educate their own children their own way, instilling in them respect for their own heritage along with respect for the heritage of others. But diversity isn't the goal of SNM. Ontario's official religion isn't looking for people of diverse denominations worshipping God (Jehovah, Allah) in their own way, but for the cookie-cutter Universal Multicultural Person (UMP) worshipping the omnipotent State.

The major argument against Tory’s ill-considered plan is that it will encourage separatism and divisiveness (for which most people read Muslim madrassas, even if nobody wants to say so out loud). But this doesn’t square with diversity being the supreme public good, as progressives routinely insist it must be. If liberals really believed in diversity, they would be promoting it - including funding it via a diverse choice of public schools. In fact what many, if not most, liberals view as the ideal is a population of many skin tones who all believe the same thing. Hence the need to assimilate the new generation to the eco-friendly, socially liberal, politically correct official culture that is propagated by the public education system. Although, then again this doesn’t apply to natives, who are not to be assimilated but have to maintain a distinct culture, even if it keeps them as wards of the state, isolated from the modern economy. And it may not apply to African-Canadians, either – the mullahs at OISE are still debating as to whether separate schools for this group – or maybe just the sub-group of Jamaican-Canadians – is permissible as a corrective for the undisguisable failures of the public system.

So the progressive view: Diversity above all else, except that the public schools must promote assimilation – only not for natives, and we’ll get back to you about Jane-Finch.

The Toronto Star argues – correctly – that the separate schools issue should be left alone for now, but admits that it will have to be settled eventually. The same is true of the confused orthodoxy on education and diversity. In fact, what really has to go is central control by the Ministry of Education. While there should be some common minimal standards imposed from the top – like a core curriculum and instruction in English (or French) - the system needs to be opened up to a wider range of educational styles. In particular, parents who want their kids to be raised in a more structured environment (e.g. more memorization, more tests, and in general more discipline) should be allowed the choice. And choice is the key idea: there is no mandate for imposing a conservative educational style on the whole system, but by the same token there is no mandate for the liberal educational dictatorship which we now have, and which, incidentally, has turned out to be a disaster in many underprivileged neighbourhoods.

To come back to John Tory, if he had really wanted to take on educational reform head-on, he could have done so (although this would probably best be left for a second-term premier who had already won the confidence of the public). Instead he blundered into a peripheral argument which is largely symbolic and which has put his political career in jeopardy.

Our Big Thinkers: Irshad on Iggy

2007-08-11T21:24:00.000-04:00

Michael Ignatieff’s recent mea culpa about the war prompted a little media burst of commentary, most of it not especially favourable to the philosopher statesman. Now Irshad Manji weighs in in today’s Globe. Irshad is supposedly one of this country’s up-and-coming new thinkers. Her piece is certainly more bombastic than Iggy’s original apology, so perhaps that makes it notable in some sense. Anyway, here we go:

But, unlike Mr Ignatieff and other ex-backers of the Iraq democracy campaign, I believe this war illuminates the most profound tensions that define what it means to be human.

In essence, Iraq is about the timeless battle between freedom and security. This is not a new theme, of course. It has been explored in such literary masterpieces as Fyodor Dostoyevsky’s The Brothers Karamazov.

Irshad must have been the star of English Lit 101: “illuminates,” “profound tensions,” “what it means to be human,” “timeless battle,” “literary masterpieces.” How many cliches can you pack into two sentences? But leaving the writing style aside, what does this actually mean? Most people would take “security” in the context of Iraq to mean physical security – like being able to go outside without having to worry about being shot or kidnapped. Irshad appears to mean something more profound, however. Security, it seems, is a kind of intellectual security – it means giving up the uncertainties of freedom in favour of being ruled by leaders who act as though they already possess the truth. In other words, the Iraqi people find freedom intimidating and would find it more comforting to be ruled by mullahs who have all the answers. This notion – that the people fear freedom and need a firm hand – is expounded by the Grand Inquisitor in Karamazov, hence the Dostoyevsky connection.

This point may have some general relevance to the appeal of Islamism to people who are bewildered by modernity, but it says very little about the particular situation in Iraq. Presumably Dostoyevsky’s broad insights into human nature would be just as valid in Kirkuk or Kabul as in Baghdad. But they don’t account for why the outcomes in these places have been so different. The mess in Iraq is explained well in terms of conventional analysis – removing Saddam left a power vacuum, the Iranians are trying to expand their influence, al-Qaeda feels it can discredit the US by wrecking the country, etc. A politician who, pre-war, wanted to understand what might go wrong would probably have done a lot better by reviewing similar case studies – like the collapse of government authority in Yugoslavia or Somalia, than reading Russian novels from the century before last.

As regards specifics, Irshad appears confused when she isn’t flat-out wrong:

And therein lies an insight into why Iraq so quickly devolved from a dance with freedom to a state of fear. Despite being accused of playing God, George Bush should have been more serious about emulating Christ. In Dostoyevsky’s story, Christ used moral rather than military authority, and thereby revealed the wisdom of non-violence. In contemporary geopolitics, moral authority is known as “soft power,” which is precisely what the Bush administration has never bothered to boast. Instead, it has indulged in a campaign of shock and awe, including the most heinous examples of torture. The White House has spoken like Jesus Christ, yet acted like the Grand Inquisitor.

Well, if we’re speaking of the Higher Power, maybe we can ask what in the name of God this means? The US went wrong because it didn’t “boast soft power”? And was the wisdom of non-violence supposed to be applied before the invasion or after? The Christian Peacemakers who went to Iraq were about as far as possible from imposing shock and awe. It didn’t do them – or anyone else – much good. And as for the most “heinous” examples of torture – presumably that applies better to the crimes of al-Qaeda drillers and beheaders than the abuses perpetrated at Abu Ghraib (which, although reprehensible, probably had no long-term political impact at all: Iraq would be the same today if they had never happened). But why quibble about accuracy – we’re talking big ideas here.

Irshad finishes by quoting more waffle from the master:

Good judgment in politics, it turns out, depends on being a critical judge of yourself. It was not merely that the president did not take the care to understand Iraq. He also did not take the care to understand himself.

In that case, maybe Woody Allen should be president – he's had a couple decades of psychoanalysis. Major political leaders of the last few decades – like Reagan, Thatcher or Clinton – don’t exactly come across as being masters of self-examination. But again, why let details confound deep thoughts?

It all makes one wonder a little about the value of education. Dubya almost never cracked a book and spent much of his young adulthood getting loaded. So what if his political judgment turned out to be crap? At least he had some fun. Irshad and Iggy plowed through stacks of boring books – and the end results are just as dismal. They don’t have a clue either. They are able to pump out a higher class of vapid and useless BS, however, than the unlettered George.

Recogitamus Iggytur

2007-08-05T21:27:00.000-04:00

First off, Michael Ignatieff deserves credit for coming out and admitting he made a mistake. Given the way most politicians will weasel their way out of admitting their slightest errors it is nice to see somebody display a little integrity for once, and it does add a little to Iggy’s stature if you consider how unlikely a retraction on any subject at all would be coming from dwarves like Layton, McGuinty, Stephane Dion or Danny Williams, to name at random a handful of our would-be leaders. If only the authors of this disaster – Cheney, Rumsfeld and W – would stand up to be counted, instead of insisting that historians 100 years from now will vindicate them. But that’s a different kettle of worms...

Unfortunately for Iggy being straight up isn’t everything. New-found wisdom is expressed in lines like: "The attribute that underpins good judgment in politicians is a sense of reality." This is actually kind of embarrassing. You’re only learning this now??

Or: "In public life, language is a weapon of war and is deployed in conditions of radical distrust. All that matters is what you said, not what you meant. The political realm is a world of lunatic literalism. The slightest crack in your armor — between what you meant and what you said — can be pried open and the knife driven home." Well, duh!

But then: "As a former denizen of Harvard, I’ve had to learn that a sense of reality doesn’t always flourish in elite institutions." Say it again, brother.

Overall, the article is mostly focussed on Iggy’s on-going intellectual development, and the contrast between the world of real-life politics and the academy (and who cares what goes on there, anyway?). And there is too much on-the-one-hand, on-the-other kind of waffle:

"Fixed principle matters. There are some goods that cannot be traded, some lines that cannot be crossed, some people who must never be betrayed. But fixed ideas of a dogmatic kind are usually the enemy of good judgment."

So a politician must stick to his principles. Except when it wouldn’t be wise to do so. Thanks, Professor.

What the article lacks is any discussion of Iraq, of what went wrong and why it changed Ignatieff’s mind. And there is not even the hint of an opinion about what to do next. Ignatieff seems to be permanently bent in the shape of an academic. His suitability for leadership has to be seriously open to question.

And while we’re on the subject, what ever happened to Stephane Dion? Is he still in the northern hemisphere? He might not win another leadership contest, but he would surely demolish the field in an audition for the lead in a remake of “The Invisible Man.” More broadly, this all reminds one of how dire the Liberal leadership situation remains. Neither of the top two from the recent leadership contest seems suited for the position. Bob Rae has more baggage than a cruise ship, and that other guy is a classic lib-leftie flake. After this, Martha Findlay should re-double her efforts.

What are they afraid of?

2007-08-04T21:54:00.000-04:00

The recent proposal by the CMA to allow private health care has prompted the usual flood of outrage that meets any suggestion of health care reform. Private care will – supposedly – result in physician shortages, longer wait times and higher costs, and is generally agreed to amount to a serious threat to public health care.

This last assumption is a little odd, however. After all, public health care is free. Why would anybody pay for something they could get for free? For a simple example, imagine a country where the right to drive a car was sacred and government institutionalized this with a free-gas policy. So every time a citizen wanted to fill up it would be free. Now suppose that some private entrepreneurs decided to set up a chain of for-profit gas stations –charging, say, a dollar a litre. Would the government need to pass a law banning them? Why bother? Such a business would be unviable. Who would volunteer to clean out their wallet to fill up, when you can do it for nothing?

But now suppose that, because the government has to buy fuel from abroad and does not have an unlimited budget, gas is still free – but to keep volume under control there are only a limited number of gas stations, so the typical wait to fill up is 3 hours. In this scenario private gas bars are no longer a dead duck. Let’s say entrepreneurs can maximize profits by charging a buck a litre. This figure actually represents a measure of the economic value of not having to line up. In other words, although government-distributed gas is nominally free, it really isn’t.

The same applies to health care. If it was truly free, private care would be a hopeless proposition - not a threat - and would not need to be regulated. The reality is Canada doesn’t have free health care. It has rationed care, which comes with an economic cost of rationing. What is this cost? It can be measured by the how much patients would pay to escape the public system.

Of course, public care wouldn’t have to be flawless (an expensive proposition) to fend off private operators. If the choice was to wait 4 weeks for a free hip replacement or pay for one today, there might be a few people who would opt to jump the queue, but probably not enough to make for a viable private business. At three years, on the other hand, a private business would probably do very well.

So what are the defenders of public care afraid of? That private care will turn out to be competitive – the price handicap notwithstanding. That the light of the marketplace will reveal public care as being so unattractive that patients will be willing to pay substantial premiums to get away from it. Rather than have an open system, with public-private competition, our socialist politicians and their supporters want to suppress the news of how patients (as opposed to administrators and healthy taxpayers) really view the system. It is reminiscent of the way socialist states like East Germany used to prevent their citizens from leaving. If they had really been as attractive as they claimed to be, there would have been no need for border guards and barbed wire.

Public health care has a huge price advantage over private care. Apart from a tiny minority of plutocrats for whom money is no object, all consumers are going to be swayed by this. Public care doesn’t have to be perfect, it doesn’t even have to be as good as private care – it just has to avoid being so bad that its lack of appeal outweighs being completely free. Not an insuperable challenge. That the defenders of public care are afraid to take it on, however, suggests they believe that public health care is in bad shape and that, given the choice, a substantial proportion of middle-class patients will vote with their feet.

The honest way to deal with the "threat" of private health care would be to meet it full on, and, if necessary, to upgrade public care to a standard where most patients would choose it voluntarily. The dishonest way – preferred, it goes without saying, by most politicians and public health care advocates, is to restrict choice by legal intervention and to suppress what would likely be some inconvenient market truths about the true value of our "free" health care.

Feebate follies

2007-08-01T21:01:00.001-04:00

A Globe editorial properly eviscerates the Tories environmental “feebate” program. Among the highlights:

- Although the program was announced in the March Budget, nobody has yet received a dollar in rebates.

- Certain fuel-efficient car models do not merit a rebate but less efficient light trucks do.

- Pickups, no matter how inefficient, are exempt from penalties because the Tories don’t want to alienate rural supporters

- The feebate schedule for 2008 models has yet to be announced. The date for this announcement has yet to be set.

- Fining inefficiency may not even work as an environmental incentive. A driver of an old model vehicle might want to trade for the new, more efficient but still penalizable, equivalent. Because of the penalty he decides to keep the old gas guzzler running for a few more years.

And a couple extra points the editorial failed to mention:

- Programs like this amount to pissing in the ocean. If the government is serious about emissions reductions it should impose an additional gas tax. If it doesn’t want to do anything substantive it should just be honest and do nothing.

- With regard to the Rubenesque proportions of the civil service, criticized recently in a number of right-wing blogs, isn't it obvious that one way to at least start to control the bloat would be by swearing off lame, confused, micro-managing public service make-work programs like the dim-witted feebate.

Brits Out

2007-07-31T22:53:00.000-04:00

Britain is pulling the army out of Northern Ireland - after 38 years. As the Guardian reports, "When the first troops arrived it was believed they would be gone in weeks - nearly four decades later their job is finally done."

At least the British stayed to finish the task. But if it took almost 40 years to see the ending in a low-level conflict like Northern Ireland, how long might it take to solve Afghanistan? Less than the time remaining until Canada reconsiders its commitment in Feb 2009?

As for Iraq, well the "surge" is already working, so no need to contemplate the possibility of a long haul of, say, 5 more years - or 30.

Toronto the Beautiful

2007-07-30T22:20:00.000-04:00

This city has its problems, of course, including its overall appearance which is often less than prepossessing. But it has its moments. On a sunny evening the little Victorian garden of St James' Park (King E and Church) really comes in to its own. Worth a visit for out-of-towners and the local inmates alike.

(click to enlarge)

Worth repeating

2007-07-29T17:02:00.000-04:00

The following letter by Bob Guenette appeared in yesterday’s Globe:

I'm glad to see our Finance Minister reads The Globe, but a little dismayed Jim Flaherty feels he has to write a letter to the editor to outline his government's plan (Manufacturing Solutions - July 25). However, a gem such as "we are moving Canada's overall tax rate on new business investment from third-highest to third-lowest in the G7 by 2011" doesn't come our way very often.

Anyone who can do the simple math will notice that moving third-highest to third-lowest in a seven country membership is a move of one placement ... over four years ... provided that the other country remains idle.

Wow, progressive thinking like that will rocket this country forward as never before.

Nice catch. This obviously isn’t that important in and of itself, but it perfectly captures the Cheez-Whiz conservatism of Canada’s “New Government” and its proffered diet of nutritionally empty fiscal measures slathered in yellowish PR goop.

My learned friend . . .

2007-07-12T22:11:00.000-04:00

...who infected a whole plane-load of people.
Well, okay, he didn't. (He just inadvertently exposed them after being warned not to . . .).

Now, strictly speaking, a rational person should stand back and say: What are the facts of the case? Was there really a criminal intention? Is the individual concerned truly liable or does liability reside in the institutional environment within which individuals act?

But come on – it’s lawyers versus lawyers! What’s not to like?!

Personal injuries attorney Andrew Speaker, who flew from Italy to Montreal despite being warned not to travel on account of harbouring what was believed to be a drug-resistant strain of tuberculosis – is now being sued by fellow passengers, basically for having caused them extra anxiety and stress. One can only presume that Mr Speaker would have had a field day – on the other side of a case like this. Forget Conrad, this is the one to watch. Let the games begin.

Numbers don't lie . . .

2007-07-11T00:30:00.000-04:00

. . . especially when they don't mean anything.

The following letter regarding health care was printed in today’s National Post:

Re: Who's The Real Sicko? David Gratzer, July 6.

David Gratzer's polemic against the Canadian health care system and socialized medicine ignores the facts. After reviewing 38 studies comparing the U.S. and Canadian systems, 17 leading Canadian and U.S. researchers confirmed this year that the Canadian system leads to health outcomes as good, or better, than the U.S. private system, at less than 50% of the cost.

As for Dr. Gratzer's prescription for Canada -- U.K.-style competitive market "reforms" -- the evidence shows that procedures in England's private Independent Sector Treatment Centres cost an average of 11.2% more than those carried out in the public system. From 2005 to 2006, the National Health Service ran up ?547-million ($1.1 billion) in debt, and in 2005 the British Medical Association called for less competition and more co-operation in health care.

The World Health Organization and the Organization for Economic Co-operation and Development have concluded that medicare is not only more equitable, but also more efficient and produces higher-quality health care than the alternatives.

This is not to say the Canadian system doesn't need reform, with successful initiatives already underway. In May, the Canadian Centre for Policy Alternatives reported dramatic cuts in waiting times for surgery in B.C., Alberta, Saskatchewan and Ontario without any need for competition -- just improved administration and team-based care.

Dr. Danielle Martin, board chair, Canadian Doctors for Medicare, Toronto.

This is a good example of the misleading use of statistics.

First, take the claim that in England treatment in the private sector cost 11.2% more than in the public sector. What is this supposed to mean? One common observation of private facilities is that they are more attractive than public ones – nicer wallpaper, clean carpet, etc. This may account for a few per cent in extra costs – and for patients who find squalid public facilities adding to their stress load it arguably does present a real economic value. But the big piece is probably time value. Suppose you have a bad toothache – and Dr Abramoff can fix it for $100, while Dr Berkowitz charges $111.20. But Dr A can’t see you for 6 weeks, while Dr B can fit you in at 3 o’clock. That extra $11.20 probably looks like a bargain, not an inefficiency.

Since Dr Martin doesn’t mention wait times in her comparison, it is impossible to know what the extra costs of private treatment actually represent.

Then, leaving aside Dr Martin’s note that the NHS ran up over a billion dollars of debt from 2005 to 2006, which doesn’t appear to be related to anything – there is the claim that the Canadian health care system leads to outcomes at least as good as those of the US but at half the cost.

This argument is often made in the public vs private health care debate, but as a bald fact it is practically useless. The reason is that medical care is subject to a strong law of diminishing returns. There is an old actuarial cliché that half of lifetime medical expenses are incurred in the last year of life. This implies that we could actually make the public system a lot more efficient. We would simply have to identify those people with a life expectancy of a year or less (regardless of treatment) and deny them medical treatment (except palliative care). We could call this the ScroogeCare system. Under ScroogeCare we would have much lower costs than today but only slightly lower life expectancy.

So if economic efficiency is the standard, medicare (i.e. public rationing) is better than the private US model. But ScroogeCare is even better. So we should move to ScroogeCare.

On the other hand, ScroogeCare would almost certainly be criticized for being inhumane. After all, some people will beat the odds. Let’s say a particular 80 year old needs a pacemaker, but the medical-actuarial model predicts he will die within a year anyway. Under ScroogeCare he would be turned down. But suppose that under the unsystematic and relatively generous regime of medicare he gets the device (eventually), and then against the odds survives for another decade. Most people would probably sympathize (to say nothing of preferring to keep the options open for themselves when the time comes), even though giving pacemakers to 80 year olds diminishes the efficiency of the system.

In short, in this view spending more money to give people better chances is more humane. Even at the cost of lower economic efficiency it is the better choice. So medicare is better than ScroogeCare.

But then by the same logic, private care – which gives patients even more chances, albeit at the cost of still lower efficiency – is even better than medicare. So we should move to private care.

Since health care spending is subject to diminishing returns a private system is almost certain to be less economically efficient than medicare for the simple reason that sick and aging individuals are prone to spend lavishly on even very marginal prospects of improvement or cure, whereas a bureaucrat looking at the same case would be inclined to spend a lot less.

Pointing out that private health care is less economically efficient than the public model is therefore simply to state the obvious. It is not an argument for one or the other.

Making martyrs

2007-07-09T23:51:00.000-04:00

In February 1983 the FBI started a siege of the Branch Davidian compound in Waco, Texas after a fatal exchange of gunfire between ATF agents and cult members. The siege ended when the compound was set on fire resulting in 79 deaths. This disaster fuelled the anti-government rage of the militia movement which was ultimately expressed in the bombing by Timothy McVeigh of the Alfred P Murrah Federal building in Oklahoma in 1995, with a death toll of 168.

In June of 1984, Indian government troops performed Operation Blue Star to apprehend Sikh extremists who had taken refuge in the Golden Temple in Amritsar. The government prevailed, but at the cost of over 80 military and almost 500 civilian deaths. The blowback was the assassination of Indira Gandhi by her Sikh bodyguards in October of the same year. This in turn was followed by major anti-Sikh riots in which thousands were killed.

These precedents may well be weighing on the mind of President Musharraf as the Pakistani military acts to clear the Red Mosque in Islamabad of militants. Nothing galvanizes the faithful like a massacre, and it is almost certain that the dust settling and the end of gunfire will not mark the end of this matter. There is a lot to be said for not taking action in a siege. The government always retains the option to go in, but if it can delay and wear down the rebels it avoids creating a powerful inspirational symbol for future militants. Of course, this doesn’t always work. The FBI tried it at Waco – they waited for almost 2 months - but did not achieve the desired results. But at least they were on the right track. The crisis in Pakistan has been building for some weeks and involves more than the occupation of the mosque. But that part has been going on for only a week or so, so perhaps the government could have tried harder to prolong negotiations. President Musharraf will no doubt do his best to avoid Indira Gandhi’s fate, and at least he has no illusions about what to expect, having already dodged a couple attempts on his life.

What distinguishes the Red Mosque situation from Waco and the Golden Temple is that in those cases the extremist movements subsequently died out, the inspirational boost from the episodes of destruction notwithstanding. But Islamic fundamentalism is much more serious and deeply rooted than the grievances of the Sikhs or the militias. Whether the government of Pakistan has just poured gasoline on the fire remains to be seen, but it is quite likely that by taking decisive action they have chosen the worse alternative.

Is there a doctor in the Dar al-Harb?

2007-07-09T00:58:00.000-04:00

Or, if the doctor asks the nurse for a scimitar you know you're in trouble. . .

Anyway . . . Mention globalization and for many people their first thought will be of good jobs being exported from developed countries to somewhere in the Third World where wages are low, so that unscrupulous corporations can make a profit. But that’s not the only way to do it. For example, you could just import Third Worlders to fill positions where the wages and working conditions are too unattractive to interest the local labour force. Which is how Californian agribusiness staffs up on strawberry pickers. Or the way the UK government fills its medical rosters. According to this, nearly 40% of physicians registered to practice in Britain got their training abroad. This has received some media attention recently in connection with matters of security. But those issues aside, it paints an unflattering picture of a health care system which cannot attract native talent.

Mark Steyn comments:

Aneurin Bevan, the socialist who created the National Health Service after World War II, was once asked to explain how he'd talked the country's doctors into agreeing to become state employees: "I stuffed their mouths with gold," he crowed. Sixty years later, no amount of gold can persuade Britons to spend their working lives in the country's dirty, decrepit hospitals (they spend enough of their nonworking lives there, waiting to be seen, waiting for beds, waiting for operations). According to a report in the British Medical Journal, white males comprise 43.5 percent of the population but now account for less than a quarter of students at UK medical schools. In other words, being a doctor is no longer an attractive middle-class career proposition. That's quite a monument to six decades of Michael Moore-style socialist health care.

So today the NHS is hungry for medical personnel from almost anywhere on the planet, so hungry that the government set up special fast-track immigration programs: Mohammed Asha, Mohammed Haneef and their comrades didn't even require a work permit to come and practice as doctors in state hospitals.

This is not exactly new news – the BMJ source is dated 2004. (It also notes that while white men are substantially under-represented in UK medical school intakes, white women are not). But the bottom line is . . . well, the bottom line: The nanny state can’t afford to pay doctors enough to make people actually volunteer to go through the grind of medical school, so it has to outsource the jobs to the less-developed world (and then insource them back since you can’t – yet – practise medicine at a thousand-mile remove from the patient). It is also worth noting that since at least some (and probably many) foreign doctors remit part of their income to their relatives back home their effective salaries are even lower than the level which prospective British students already find subpar. It might also be remarked that it is perhaps a little unethical to drain off scarce medical talent from poorer nations to service the populations of wealthier ones. But the UK's public health central planners don't appear to mind.

Number Four, with a bullet

2007-06-24T11:09:00.000-04:00

Since it’s the Lord’s Day (as it used to be called), a little note about religion.

A review by Anthony Gottlieb last month in the New Yorker of some of the recently published anti-God diatribes (Dawkins, Hitchens, Harris, et al), ends with the observation that unbelief is probably now the world’s fourth-largest persuasion, having reached at least half a billion from a standing start, noting that “. . . from the start of the Christian era until the eighteenth century, there were probably very few people in the West who thought that there was no God of any sort.” But then:

After making allowances for countries that have, or recently have had, an officially imposed atheist ideology, in which there might be some social pressure to deny belief in God, one can venture conservative estimates of the number of unbelievers in the world today. Reviewing a large number of studies among some fifty countries, Phil Zuckerman, a sociologist at Pitzer College, in Claremont, California, puts the figure at between five hundred million and seven hundred and fifty million. This excludes such highly populated places as Brazil, Iran, Indonesia, and Nigeria, for which information is lacking or patchy. Even the low estimate of five hundred million would make unbelief the fourth-largest persuasion in the world, after Christianity, Islam, and Hinduism. It is also by far the youngest, with no significant presence in the West before the eighteenth century. Who can say what the landscape will look like once unbelief has enjoyed a past as long as Islam’s—let alone as long as Christianity’s? God is assuredly not on the side of the unbelievers, but history may yet be.

The article contains a number of other interesting notes, including the sociological nuggets that “most Christians don’t know who preached the Sermon on the Mount”, and that it is estimated that “maybe only half of the Americans who say that they regularly attend church actually do so.”

And there is also this critique of Christianity, from a classical source:

“On the True Doctrine: A Discourse Against the Christians” was written in 178 A.D. by Celsus, an eclectic follower of Plato. The Christian deity, Celsus proclaimed, is a contradictory invention. He “keeps his purposes to himself for ages, and watches with indifference as wickedness triumphs over good,” and only after a long time decides to intervene and send his son: “Did he not care before?” Moses is said to be “stupid”; his books, and those of the prophets, are “garbage.” Christians have “concocted an absolutely offensive doctrine of everlasting punishment.” Their injunction to turn the other cheek was put much better by Socrates. And their talk of a Last Judgment is “complete nonsense.”

As Gottlieb wryly observes, “There’s not much more where that came from.” Once Christians came into power they destroyed pagan anti-Christian writings wherever they could find them. An entertaining read.

How to Lose in Afghanistan

2007-06-24T01:06:00.000-04:00

A good article by Michael Fumento on Afghanistan in the Post on Thursday points out how badly undersupplied the Afghan military and especially the Afghan police really are.

I won't give exact numbers for security reasons, but for their AK-47s they had just enough ammo to sustain a brief firefight (fortunately most are quite brief ). At one station, they were delighted to inform us not just how many AK magazines they had per soldier but that the magazines were completely filled.

Police stations don’t have enough sandbags or razor wire to defend themselves properly against the Taliban. As Fumento puts it: “Not being overrun seemed near the limit of what these outposts could do.” There aren’t enough uniforms. And in some cases the government is not even able to meet the decidedly meagre pay of $75 a month. On the other side, however, the Taliban is reported to pay its fighters a much more competitive $13 a day, a wage which may even be luring away Afghan regulars.

It is not as though there isn’t money available for the Afghan conflict. A single Hellfire missile is reported to cost about $107,000. Enough to pay 1,400 police salaries for a month. Or provide almost 20,000 extra AK-47 magazines, something which would have direct tactical significance, as Fumento also reports that one Taliban ploy is to fire off RPGs at an outpost and then assess the state of its defences by the volume of answering fire.

Despite the shortcomings of the Afghan forces, however, Fumento appears optimistic and writes that the war is winnable – if these problems are addressed. Unfortunately, there is little reason to think they will be. If further evidence were needed as to the United States tone-deafness at nation-building it is here. Building up domestic police and military is surely a critical task. For an American-backed government to be unable to afford uniforms, salaries, or even bullets indicates a serious failure to understand the issue. And the remarkable fact that, 6 years after 9-11, the world’s wealthiest and most powerful nation is being outbid by an impoverished bunch of flea-bitten mullahs is a long way from encouraging.

"National Champions"

2007-06-23T19:08:00.000-04:00

Puh-leeze. “[A]nother big, fat, slow, stupid, overpriced, under-performing monopoly,” as Andrew Coyne puts it. That is what Belus is going to be – assuming the regulators allow the proposed bloated monstrosity to come into existence.

Here are a few things we don’t need: A Competition Bureau, foreign-ownership restrictions, and inefficient oligopolists (i.e. “national champions”).

If foreigners want to invest in Canada, employ Canadians, create jobs, build plants, pay taxes – and, in the process, provide a broader and more competitively priced array of goods and services to the benefit of the Canadian consumer – well, let them! If enough of them do so we won’t need a Competition Bureau. Hard as it may be for the economically challenged to believe, in an open market competition actually takes care of itself. If capital wants to flow into the country, why are we building dams to keep it out? If foreign-owned companies want to set up shop here let them. Americans telcos should be allowed to operate in Canada. If they can provide cheaper wireless services for Canadian consumers (which shouldn’t be hard, given that they currently offer consumers in their home market service for half the price in Canada) – then let them do it. And we don’t need to stop there. Imagine an open skies policy which allowed any airliner that flew inspection-approved planes to fly anywhere in Canada. Or a financial policy which allowed any bank from anywhere at all to offer Canadians mortgages or credit cards. A truly open market would allow the best, most efficient companies in the world to offer their services to Canadians – and the money that consumers saved from lower cell-phone charges, cheaper banking and more affordable air travel would be spent or invested elsewhere in the economy. It’s win-win.

Economic hypochondriacs who fear this would lead to a mass die-off of all Canadian-owned businesses can take a chill pill. RIM, for example, a genuine national champion, which actually competes outside the national sandbox, does not appear to need protection for its share of the domestic wireless hand-held market. Tim Hortons saw off Krispy Kreme without breaking a sweat, and 2nd Cup seems to have survived the arrival of Starbucks. And even if the worst happens – say the Bay goes under because of Wal-Mart – well, how many shoppers are going to shed a tear?

But if 2nd Cup, or Timmies or the Bay don’t merit protection as “strategic” industries, why does Air Canada, which is little more than a bus company? Why, for that matter do the telcos or the banks?

Here are a few things we do need: Free trade, low and simple taxes, and, above all, a willingness to engage in a free, competitive and open market economy.

And if we gave our so-called “national champions” a swift kick in the butt by allowing in enterprising foreigners, we’d all be better off.