Wikileak and Irony

This is so far my favorite story in connection to the Wikileaks recent activities (from Third Party and Independent Daily):

Germany's Free Democratic Party, or FDP, is the junior partner in Chancellor Angela Merkel's ruling coalition between the CDU/CSU and FDP. The party's chairman is Guido Westerwelle, who is currently serving as Foreign Minister and Vice Chancellor of Germany in Merkel's cabinet. In Germany's 2009 general election, the FDP garnered almost 15% of the vote and now holds 93 seats in the German parliament. The FDP is usually referred to as a classical liberal, or libertarian, party for its strong defenses of economic liberalism and civil liberties.

The cable frames the FDP's support for citizens' privacy rights and individual liberties as a hindrance to US security strategy, and states that, if it were to join a ruling coalition in Germany, the party would scrutinize any proposals that would require sharing or accessing of information concerning private individuals. The cable faults the party's "limited government viewpoint" for its opposition to data-sharing measures that would infringe on the privacy rights of individuals.

In a most ironic turn, the leaked cable scoffs at FDP Parliamentarian Gisela Piltz, who cautioned against data-sharing operations with the US government on the grounds that the US government as a whole lacks effective data protection measures even as it accumulates massive amounts of data on innocent citizens.

Silly classical liberals and their mistrust of government.

Keith Martin and the rise of partisanship in federal politics

Keith Martin has long been my favorite Liberal Member of Parliament. He is a true liberal when it comes to civil liberties and the drug war. He is also one of the most open minded MPs when it comes to health care reform. My dream federal election is Maxime Bernier versus Keith Martin.

My dream has gone from being unlikely to impossible because Keith Martin has said that he will not run again for Parliament.

This seems to be a pattern lately. All the best politicians from all parties have been steadily declining to reenlist for another term of service. Mr. Martin gives us an indication of why:

"This is deeply dissatisfying to all Members of Parliament and indeed Senators. There's a deep and profound level of dissatisfaction across party lines amongst the members that this has become a colossal waste of taxpayers' money," said Mr. Martin (Esquimalt-Juan de Fuca, B.C.), who has seen Parliament change over the last 17 years that he's been an MP. "Taxpayers are not getting value for money, at all. Many committees are ground down by partisanship. The committees have just become another theatre for political warfare, an extension in fact of the House. Studies, when they are done, cost the taxpayers hundreds of thousands of dollars, and yet are compiled and thrown onto a shelf to collect dust. So, where's the actual effect of the activities that are taking place on the hill to benefit the public that pays for all of this? It's simply not occurring."

Of course the complaint that Parliament is too partisan is hardly a new one, but it really does seem that it is getting worse.

An easy excuse is that the rise in partisanship is caused by the age of minority parliaments and legislative deadlock, but I don’t buy it. Other countries routinely experience legislatures that are even more split and divided than Canada’s. Yet they seem to find ways to reach across the floor and work together at least to some extent.

So what is the problem? What has been different the last few years? The more I think about it the more I have to come to the conclusion that the fault lies with the current Conservative Party leadership.

Don’t get me wrong. The Liberals and other opposition parties have been guilty of adding to the absurd levels of partisanship. There are no bloodless hands in this matter. Still it is the Conservatives that have taken things to a whole new level.

Early in the government’s first mandate they distributed to MPs a manual describing how to disrupt committees. Committees have traditionally been the place where MPs can put aside partisan concerns (okay at least partly put aside partisan concerns) and enter into real debate. Now, as Mr. Martin says, committees have become nothing more but an extension of the show boating seen in the House. This attitude of hyper-partisnaship seeps its way into everything that the government does, from rhetoric to policy everything is about Liberal bashing. Try to remember the last time a Minister of the Crown made a public policy announcement and refrained from taking a stab at the opposition.

It is not surprising that good people like Jim Prentice and Keith Martin are giving up and going home. Wouldn’t you?

The Fatal Conceit of Canada's Health Care System

Policy Matters has published a collection of short essays discussing possible health care reforms. Included in this collection are essays by Maxime Bernier and Mark Rovere (of the Fraser Institute). Both of them address the primary problem of Canada’s health care system: sustainability. They approach the issue from different directions but they come to the same basic conclusion that the Canada Health Act has to be reformed to allow more policy experimentation.

In contrast, Dr. Jeffery Thurnbull, President of the Canadian Medical Association, failed to address the problems of the Canada Health Act. In his own essay he writes:

Although Canadians report that they are highly satisfied with the care they receive once it is delivered, they all too often have to wait for services such as diagnostic tests and surgery. Justifiably, they are not only increasingly concerned about long waits for services covered by the Act, they also worry about the financial costs of care that falls outside medicare, such as out-of-hospital pharmaceuticals and home care.

Long wait times are indeed an important issue, but it is actually just a byproduct of the problem of sustainability. Provincial governments have cut back on the availability of services in an effort to cut costs and prop up the failing system. Furthermore suggesting that the problem is that the Canada Health Act is not encompassing enough is counterproductive. Increasing the services covered under the Canada Health Act will only put more pressure on the system.

To be fair he does address sustainability as a side issue, but his answer to the problem is entirely inadequate:

The system must be properly resourced in a sustainable manner. It must be resilient, capable of withstanding or accommodating demand surges and fiscal pressures. It must have the capacity to innovate and improve. Monitoring and documentation of emerging health needs and the burden of illness must be undertaken on an ongoing basis. Strategies must be developed and implemented to meet those needs properly.

This is what Hayek called the Fatal Conceit. The idea that government can know what resources should go where, and that the state can predict future needs, is fundamentally flawed. For evidence that it is flawed all you have to do is look at the health care system as it already exists.

Does Dr. Thurnbull think that government isn’t already attempting to “[monitor] and [document] emerging health needs?” Does he think that the government doesn’t already want to develop and implement policy that will “meet those needs properly?” Too often people think that the solution to government failure is that you need to fiddle with current programs or expand government control. Too many people never consider the possibility that there are just some things that government cannot do.

Nothing that Dr. Thurnbull suggests in his essay would fix anything about the health care system. At best he wants to move some incentives around, and at worst he will actually make the situation more drastic. He offers no real change to a system that desperately wants reform.

Only the introduction of private comprehensive insurance would save Canada’s health system, and it is time that the federal government allows the provinces to experiment in ways of getting this done.

TSA missed 12 razor blades

Adam Savage of Myth Busters managed to accidentally get on a plane while carrying 12 razor blades:



TSA's argument has always been that they are making flying safer. I think it is time that we start questioning that assumption. More security is not necessarily better security.

The true danger of a second Korean War

Professor Stephen Taylor of Troy University underlined the biggest danger of North and South Korea going to war in an article at Outside the Beltway.

It is not so much that we should fear a North Korean victory, because this is a very unlikely outcome. Even with their much vaunted million man army, North Korea doesn’t stand a chance. No the real danger is in what would happen afterward:

Moreover, and this is the main point I wish to make, I would argue that a fundamental reason that there is a basic impasse regarding the North (and why the Chinese continue to prop up the regime) is that no one, not the South, not the Chinese, wants to deal with the massive humanitarian crisis and refugee problem that would result from a collapsed North. To be somewhat redundant for explanatory purposes, I think that this point is key to understanding Chinese behavior: it is less that are actively supporting the North out of some positive affirmation of said regime as much as they know that should the North collapse that that the would be a massive wave of refugees from the North that would seek solace in China. Given the choice between having the current problematic regime on their border or a failed state in the midst of a massive humanitarian crisis on their border they opt for the former. It is an understandable preference.

It should be noted that the South has a similar problem: even if a resumption of military engagement with the North led to “victory” for the South, the bottom line would be that the South would then be responsible for absorbing and rebuilding the North. While on the one hand there are many in the South that would like for reunification to eventually take place, on the other there is an enormous cost to be affiliated with such an outcome—especially if it came in the context of war or the spontaneous collapse of the North.

Lowering cost of post-secondary education is a mistake

Liberal leader Michael Ignatieff has announced that easing access to post-secondary education will be in his party’s platform in the next election. The importance of post-secondary education is something that we hear a lot about. It is suppose to be the vehicle in which Canada’s youth will learn the skills they need to succeed in the work place. So it appears reasonable policy to encourage more people to attend university or college.

The problem is that lowering the cost is also lowering the value of attending post-secondary institutions.

Two years ago when I was still an undergraduate student I noticed a phenomenon among some of my fellow students that I refer to as the Nothingbettertodo Syndrome.

Personally I was passionate about politics and history and so I tackled those topics in University with excitement and energy. But I was a rarity. Most of my peers when asked why they were taking a course would shrug and confess that they weren’t good at math and they didn’t know what else to do. They had no goals of achieving skills or knowledge; they were not really accomplishing anything by investing into their education.

The Nothingbettertodo Syndrome isn’t felt purely in the arts either. You can find the rudderless in the student body of every program in every College or University. There are some that have specific goals but many are simply there to avoid making decisions about long term career goals.

You might think that there is nothing wrong with that. You may consider that there is nothing reprehensible about sitting back drinking a beer while you read online summaries of Plato’s Republic and think about what you want to be someday. You may think that and actually I agree with you.

There isn’t really anything inherently wrong with the Nothingbettertodo Syndrome. As long as you are able to afford it on your own or with your parent’s help, go ahead do as you will. The problem comes when you are expecting taxpayers to subsidies your indecision and this is what happens when the government artificially lowers the cost of attending university or college.

Young people suffering from the Nothingbettertodo Syndrome are a lot more likely to go to post-secondary if it is cheaper. They will occupy a seat in the classroom and scratch out Cs between games of beer pong. Then they will leave with a degree or diploma and employers would have no way of distinguishing between these lackluster students and graduates that made a real effort to learn the skills that their diploma implies.

Employers will then see less value in hiring someone with a degree or diploma, thus undermining the whole reason most students went to school in the first place.

The reality is that not everyone should go to college. Not everyone will gain any value out of going to university. By insisting that everyone should have access and lowering costs Michael Ignatieff would undermine the post-secondary education system. But by forcing students to pay the full cost of their education you ensure that we are filling schools students that truly want or need that education.

My endorsement of Lord Voldemort

For too long the Ministry of Magic has been encroaching on the lives of wizards and witches. It seems like the Ministry has laws controlling every aspect of day to day life and departments for every little detail of the wizardering world. Everything from telling wizards how they should travel to what potion ingredients they can buy, the Ministry sticks its Hagrid size nose into your business.

In recent years the situation has become worse. The amount of laws being passed, with limited consultation, has multiplied at an alarming rate. Furthermore the autocratic control over the news services should alarm anyone who believes in free speech or fairness. The Ministry feels that it can rule by arbitrary decrees and that the people are nothing but obedient sheep.

Luckily for us the Ministry is wrong. There is at least one brave soul who has the will and the strength to stand up against the Minister and his gang of oligarchic rulers.

I speak of course of the famous Lord Voldemort.

Of course Mr. Riddle and I do not see eye to eye on every issue. For example I strongly disagree with his pro-murder position, but I am a political pragmatist. I realize that we are not all going to agree on all issues. If we want to take on the Ministry we are going to have to build a broad based inclusive movement.

This is a time for solidarity; to look for common ground among the Ministry’s opponents. Focus on what unites rather than divide. Once that battle is over we can then turn to other issues but only after we have gotten rid of the autocratic Ministry of Magic.

It is for this reason that I have decided to enlist in the Death Eaters and support Lord Voldemort’s bid for power.

The fiscal disaster of Ontario

A guard walks into a prisoner’s cell and says, “Good news we are only going to whip you 20 times today.”

That is the sort of good news that Ontarians received when they learned that the budget deficit is $18.7 billion and not $19.7 billion. Yes it is better but it is not really a good thing. A study recently done by the Fraser Institute shows that Ontario has the worst fiscal policy of any other provincial government. In that context a billion dollars up or down is not really worth anything. The problems of Ontario are much more fundamental than that.

This is demonstrated by the reaction of the Dalton McGuinty government to the reduced deficit: they immediately found a way to spend a billion extra dollars. For this government being less in the hole means that there is more money to spend. Instead of breathing a sigh of relief that the fiscal situation is slightly less of a disaster, the Ontario Liberals have pledged to ensure that the budget deficit is maintained at a stable level.

This is even more galling when you consider the program that the billion dollars is going to be spent on. The Government of Ontario has announced that hydro fees will be reduced by 10%.

This sounds good but it is annoying because electricity bills have been increasing lately due to government policy. McGuinty’s environmental plan and regulations have been the root cause in the upsurge of electricity costs in Ontario. The costs, as always, are being passed on to consumers; this has created a political problem for the government. But instead of reducing the regulation the government has decided to spend more money to try and lessen the impact.

To add another layer of annoyance, the decreased deficit is not due to any government policy. It came about because of a surprising upsurge of business profits.

So because of the hard work of individuals in the market place, the government now feels free to spend more money to try to fix a problem that the government caused in the first place.

In the end, the fiscal problems of Ontario will only be solved if the government changes its attitude towards taxpayer’s money and stop trying to spend its way to utopia.

How would you balance the budget?

The New York Times has created a “Budget Puzzle.” You are given a set of policy options and you must select enough options that the USA budget will become balanced in 2015 and 2030.

Frankly some of the options present false choices, such as the decision to cut foreign aide by half or not. Why can’t I just cut all of it?

Still, this could (theoretically) reflect natural limitations on policy such as institutional inertia or what is politically possible. So even with that limitation I found it an interesting exercise and a good way to make people aware of how much needs to be done to balance the USA federal budget.

You can take a look at the methodology behind the numbers here.

It is time for Keynsians to abandon "stimulus" theory

It never stops amazing me that intelligent people still believe that the so called “stimulus” policy can actually work. There is zero evidence that it has done anything overall beneficial (obviously some individuals have benefited) and there is a great deal of evidence that it is harmful.

Veronique de Rugby of Reason Magazine provides a good metaphor to explain exactly how it has been harmful:

Imagine that I break my arm, but instead of getting a cast I take a big shot of morphine. The drug will make me feel better, but it won’t fix my arm. When the effect wears off, the pain will come back. And instead of being restored to their proper position, my bones will remain out of place, perhaps solidifying there, which will surely mean chronic pain in the long run.

Stimulus spending is like morphine. It might feel good in the short term for the beneficiaries of the money, but it doesn’t help repair the economy. And it causes more damage if it gets in the way of a proper recovery.

The evidence of failure is even clearer in Canada than the United States.

How can you claim that a stimulus accomplished anything when the vast majority of the money was never actually spent? The economy is recovering and the government has barely tied up its shoes. Is seems more than likely that the “stimulus” budget had no or little positive influence on the economy, it in fact seems obvious.

The only argument that proponents of this failed policy can pull together amounts to: it would have been much worse if we hadn’t spent this money. This is not based on any facts in reality. It is based, if it is based on anything, on the economic models that assume that “stimulus” theory is correct. So basically the only argument that they have is an assumption that they are right.

By the way, the same models predicted an enormous success that has not come to pass. Again de Rugby explains this failure:

Unless you believe that federal spending magically conjures up purchasing power (or that morphine heals bones), the total GDP will remain unchanged, because the federal government has to borrow the stimulus money from either domestic or foreign sources. This borrowing in turn reduces other areas of demand.

Stimulus spending does not increase total demand. It merely reshuffles it, leaving the economy just as weak as before—if not weaker, since it also increases the national debt. By trying to ease the pain, the administration may well have made the patient worse.

It is time that all serious people admit to themselves that “stimulus” theory is debunked.

Ben Bernanke fails to understand a concept that a child can grasp

I was stunned to learn that Stephen Harper is defending the insane policy of Fed Chairman Ben Bernanke. The rest of the G20 are outraged by the US plan to save the economy by magically creating money out of thin air, and they should be outraged. The collapse of the American dollar will hurt not just the American economy but the Global economy as well.

The thing I find so confusing about Mr. Bernanke’s plan is that the flaw is so obvious and so simply that I cannot understand why he fails to grasp it. You create more money that money is worth less. This is basic supply and demand economics that I learned in high school.

Actually I learned about the danger of magically duplicating money even before high school. I was taught by my favourite economics teacher: Scrooge McDuck.

The young and foolish nephews of Scrooge have gotten a hold of one of Gyro’s inventions. The gizmo can duplicate anything that you point it at, and of course money is an obvious thing to duplicate.

If you skip ahead to 2:48 in the following video you can see Scrooge explaining to his nephews why this is a bad idea:



So if as a child I was capable of understanding why magically duplicated money is a bad thing, why can’t Stephen Harper and Ben Bernanke?

Keith Olbermann

Meeting Penn and Teller at Massey Hall

I am not the type who is usually interested in meeting celebrities. Big names from both popular culture and politics never really get me excited. After all they are merely humans and unless I have an opportunity to actually strike up an interesting conversation, I feel no need to meet them. Merely shaking a hand or getting an autograph has never held any value for me.

This was the exception. I was about to shake the hand of Penn Jillette.

I watched as my friend, who is normally the cool intellectual type, become increasingly giddy. He jokingly but accurately compared his behavior to a 13 year old girl. Then immediately threatened to end any association with me if I was so incompetent to screw up the picture (which I did but I managed to quickly take a second shot to save the friendship).

For my part, my hand was actually shaking in excitement (which is why I screwed up the first picture). I noticed that he was signing autographs and I cursed myself for discarding my program. I realized with a start that I had a book in my bag and that I could get him to sign it. The book was Ron Paul’s Revolution and I thought to myself: “perfect.”

Penn Jillette’s outspoken libertarianism is of course a big reason that I like him. But it goes beyond a culturally isolated libertarian grasping at the life preserver of a co-ideologist that managed somehow to break into popular culture. I don’t think I would have been nearly so excited if that is all they are.

Next, my friend and I went to get a similar picture and signature from the second part of the duo, Teller. The crowd around him was a lot smaller and it was much faster to get to see him. Still I was every bit as excited.

My Ron Paul book created the perfect illustration of the differences in style between Penn and Teller. Whereas Penn, upon presentation of the book to sign, exclaimed “oh my,” and gave a hardy laugh, Teller gave no outward expression. The short and quiet man signed it then looked me in the eye, some how conveying a wink without actually winking. When I looked down at his signature I saw that he had written, in addition to his signature, “He is right!”

As I said, their libertarianism is not the cause of my excitement (I meet a libertarian everyday when I get up and look in the mirror). For the two hours that they talked about their life libertarian ideas only came up once and then only because of an audience member’s question.

The thing that makes their life story so compelling to me was that it is really the story of an evolution of an idea. Penn confessed that he despised magic when he was young because he thought that it is a lie. Always a moral evangelical, Penn Jillette was and is outraged by the lie that he felt magicians such as the Amazing Kreskin is perpetuating.

As he was entering adulthood Penn met Teller, who was already a Latin teacher. It was Teller that introduced Penn to the idea that magic can be truthful in the way that it lies. That idea and the moral questions that form around it has been the foundation of their work, their partnership, and ultimately their lives.

You’d think that the philosophy of a juggler and a magician would be relatively simple, but it is that which makes Penn and Teller so compelling even after 35 years. They honestly care about what they do. They care about what it means to do what they do and how what they do influences people and ideas.

We should all do this. We should all take the time to think deeply about how we live our lives. Not because you should find fault and make changes, but to know what it is to live the life you are living. To find meaning in your life is to look at the moral and philosophical basis of what you do in the world. What is it that you believe and how should you live your life in that belief?

Socrates is reported as saying that the unexamined life is not worth living. If this is so then Penn and Teller have definitely lived a life worth living.

And that is why I was excited to shake their hands.

Foreign investment creates jobs

The main argument against Foreign Direct Investment is this idea that it leads to a “hollowed out” country. That is, all the high paying corporate jobs are taken away and head offices are established in foreign countries. This concept has zero bases in reality. As Mark Milke of the Fraser Institute writes:

It would be helpful to recall why foreign investment matters, especially as it concerns the fear that Canadian head offices are “hollowed out” in foreign takeovers. A 2006 study from Statistics Canada looked at the claim that head offices were disappearing in Canada due to such takeovers. The claim is false. Between 1999 and 2005, “domestic firms taken over by foreign firms created about as many new head offices as they closed,” noted StatsCan

In fact, on jobs, foreign companies created more head office jobs than did domestic firms in the period surveyed. Foreign-held companies added 21.2% more head office jobs between 1999 and 2005, compared with only a 5.8% increase for domestically controlled firms. Another StatsCan study the previous year, but over a longer period (1973 to 1999), revealed a similar trend: Foreign-owned head offices “had about 25% more head office workers than domestic firms.”

So let us review the argument for FDI:

1. Brings in capital which helps to create improvements, which increases prosperity
2. Brings in innovative technology and management methods that improve productivity, which increases prosperity.
3. Creates more jobs including high paying executive jobs, which increases prosperity

And arguments against FDI…

Three reasons why the midterm election didn't change anything

The always Reasoning Reason TV:



(thanks to the Volunteer)

Gordon Campbell steps down

BC Liberal Premier Gordon Campbell has stepped down. It is a shame that he has had to go like this. The man in many ways has been a great premier for British Columbia. The Fraser Institute has recently released a study on the fiscal policies of Canada’s premiers, and Gordon Campbell was on top of the list for good sound policy.

He wasn’t perfect certainly (not nearly so) but he was right on many important issues. Even in the face of mass opposition he remains right on the HST. This reform is what is best for BC, especially when paired with recently announced income tax cuts.

I hope that his fall from popularity and eventual abdication does not discourage other politicians from implementing sound economic policy. In the long run I am convinced that history will be kind to Gordon Campbell.

Tea Party Caucus a bad idea

The first interview that Rand Paul gave, after his acceptance speech for US Senator, he said that he will be pushing for the creation of a Tea Party Caucus. This is actually a bad idea and I sincerely hope that Dr. Paul does not put too much effort into making it happen. The potential benefits are far outweighed by the drawbacks.

First of all consider that the Tea Party and the candidates that they supported are not ideologically coherent. They don’t represent similar constituencies or interest groups. The only thing that they have in common is that they all want to decrease the size of government. Since this should be a common goal with all Republicans (and Democrats) they shouldn’t need to create a caucus specifically for that goal.

More importantly it runs counter to the strategy of the Tea Party as an outsider to normal political institutions. By creating a caucus within the Republican Party Dr. Paul will be encouraging a trend of making the Tea Party an institutional part of the Republican organization. This is a trend that should be resisted by Tea Party organizers. Part of the value of Tea Party activism is that it is a movement and not a political party.

One of the reasons that it is important to keep a distance between the Republican Party and the Tea Partiers is that it becomes harder to keep elected officials accountable if you are tied by party loyalty. The great challenge of the Tea Party movement will now be to hold the newly elected official’s feet to the fire. They need to ensure that they fight for the things that they said they will fight for.

This is far easier if at any point the Tea Party organizers can threaten to withdraw their support. This threat is a lot more difficult to carry out if their support is institutionalized inside a caucus. There is no one leader of the movement, so who decides who should be kicked out of this caucus? What criteria will members are judged by?

It is a much simpler idea to avoid any Tea Party Caucus and allow Tea Party support to flow in the sort of spontaneous way that is already happening. This keeps the movement in the hands of the people.

I am sure Dr. Paul means well for the movement, but a Tea Party Caucus would not benefit the movement.

Hayek versus Keynes 2

Econ Talk hosted by the Economist present their follow up to the now famous Hayek vs. Keynes rap.