Rand Paul: stop aid to Israel

Senator Rand Paul has come out solidly against foreign aid, all foreign aid. Does all foreign aid include aid to Israel? For once we have a politician who is intellectually consistent, so yes ending all foreign aid includes ending aid to Israel.

The prospect of not handing money over to Israel for no good purpose has kicked off a fire storm. What I find fascinating about Rand Paul’s critics is that most of them seem to be complaining that this would hurt Israel’s interests.

Not to sound callous or anything, but isn’t it the job of a US Senator to be concerned with US interests not Israel’s? Shouldn’t the debate be how handing out 3 billion dollars advances American goals, not how stopping would hinder Israel?

Rand Paul points out that stopping all aid would include stopping handouts to Israel’s enemies (he also grumbles correctly that America has been funding two sides of an ongoing conflict, thus enabling that conflict to continue). I can’t help but think that Israel’s traditional enemies benefit disproportionately more from aid. They are after all much poorer and receive about the same amount of money each.

But without getting bogged down in the discussion of what is good for Israel let us go back to considering what is good for the USA and its taxpayers.

The most common argument is that the USA needs an ally in the region. I don’t see how Israel has ever been useful to American interests with the Arab world, and I can actually think of a few ways that it has been detrimental. Even if there is a usefulness for America to be allied with Israel (which there may be one that I am missing), Israel clearly benefits more even without a $3 billion subsidy. That being the case, would the alliance seriously be in danger if the subsidy ended?

Another argument is that the USA should not abandon a stalwart ally. Well Canada has been a far more useful ally for far longer than Israel, where is our hand out? Besides of course Israel is ‘stalwart,’ they need the United States far more than America needs Israel.

At least one commenter took issue with Rand Paul’s assertion that in a time of budget deficit foreign aid is a logically program to cut. The claim is that deficits should not be used as an excuse to “abandon Israel.” Frankly not having enough money is always a good reason not to do something, even if that something is perceived as a good thing. I would love, for example, to give a million dollars to cancer research, but I don’t have that kind of money, so I don’t.

I am glad that Rand Paul has taken this principled stand against foreign aid. I am hopeful that he has been able to launch a real meaningful debate on both foreign aid and America’s relationship with Israel.

Conservative strategists must have gone to Clone High

Stylistically the similarities are uncanny:

Ron Paul on Iraq: from friend to enemy

New Conservative advert attacking Ignatieff on corporate taxes

The best thing I can say about this advert is that it at least takes on a substantive issue. This virtue is somewhat ruined by the tag line "he didn't come back for you" at the end, but close enough.

Note to Dr. Ignatieff: education does not create jobs

Liberal Party leader Michael Ignatieff has come up with an interesting (if bizarre) little theory. If more people have higher education then jobs will magically appear. Here is what he said:

“If we’re going to have a big argument here about how to create jobs, how to create a future for the Canadian economy, this is a debate that we welcome,” he said. “You can cut corporate taxes when you’re in a surplus. Cutting it in a deficit adds to Canada’s financial woes and we think the way to create jobs is invest in post-secondary education and help small and medium enterprises to become more competitive and take on more workers.”

So the financial situation means that we can’t afford tax cuts but we can afford new spending on education? But that’s not what I find most bizarre about the above paragraph (for a complete discussion on this silliness check out Mike Brock’s article).

If medium enterprises hire more people wouldn’t they become large enterprises and thus unworthy of “help” in the eyes of the Liberal Party? But again that isn’t my main objection.

The part that really has me scratching my head is this idea that “investing” in post-secondary education will create jobs. I have often heard that there is a need for more skilled labour, but the jobs that need that labour already exist. They are just waiting to be filled. But can having a higher education actually create a job?

Consider someone who has just graduated from an engineering school. They are interested in getting into the mining industry. Will then a job in the mining industry spontaneously appear to accommodate this desire?

Of course not.

For that job to exist someone has to invest the money to develop the resource. You can have all the expert engineers in the world but if no capitalist is willing to take a financial risk then they will all be working at Wendy’s.

I find Dr. Ignatieff’s lack of basic understanding of…well of reality, to be very worrisome.

The poor are getting richer

Steven Horwitz wrote an opinion piece that declares that the poor are not in fact getting poorer. He points out that direct comparisons between 1979 and today are meaningless because the households that were poor in 1979 aren’t the same as the ones that are poor today. Most of the people, according to Mr. Horwitz, that are recorded as being “poor” are merely on the first step of the income ladder. Most of them were able to take more steps on that ladder and have moved above the bottom 20% to be replaced by a younger cohort. I for example would be easily classified as poor, but I am unlikely to remain poor my whole life.

So simply pointing to the earnings of the bottom 20% misses a lot of what happens over a life time. Such a methodology does not take into account income mobility.

Mr. Horwitz also takes issue with research that looks at the income gap. Income is not the only indicator of wealth or prosperity; it may not even be the most important indicator. Mr. Horwitz explains:

The gap in personal conveniences has clearly narrowed over time. Consider that both Bill Gates and more than 80 percent of poor American households own cars - though likely differing in quality. Fifty or 100 years ago, the difference would not have been in the quality of car, but in owning a car at all.

Yes, there are more Americans in poverty during a recession - some in deep poverty - as the institute's data shows. But it also shows that since about 1980, the share of the population in extreme poverty has hovered between 5 and 6 percent. In other words, there's no long-term upward trend in the percentage of households living in extreme poverty.

The reality of the modern U.S. economy is that upward mobility is alive and well. One look around at even the bottom fifth of American households today - where children are watching cable TV, surfing the Web, or chatting on cell phones while Dad takes free generic medicine and Mom heats something up in a microwave - shows the poor are hardly getting poorer.

Mr. Horwitz is eloquently making a point that I have often thought about.

Today’s bottom 20% enjoys luxuries that were unheard of 100 years ago. The poorest among us live better than a mediaeval king. How can you possibly claim that the poor are worse off?

I would go further than saying that the poor are not getting poorer. I would say that they are getting richer.

They are getting richer not because of any government program but by the luxuries provided by the market. Capitalism has given us all cars, televisions, and phones. It is capitalism that has vanquished the true poverty of our ancestors.

The Paul Plan

Cutting federal spending in the USA has bipartisan support and yet the debate on what to cut is still extremely vague. Politicians are afraid to anger special interest groups and so they declare that they are for cuts but cower when asked for specifics. Understandable given the way that politics works in the States, but for anything to be done at least one politician has to present a concrete plan.

That politician is Kentucky Senator Rand Paul:

The budget-cutting plan introduced Tuesday, Paul’s first major legislative proposal, would cut $16 billion in funding for the wars in Afghanistan and Iraq. It also would eliminate the Departments of Energy and Housing and Urban Development and most of the Department of Education.

Further, it would eliminate international aid and numerous agricultural programs, and subsidies to Amtrak, the Corporation for Public Broadcasting and the U.S. Government Printing Office.

“By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40 percent of our projected deficit and removing the big-government bureaucrats who stand in the way of efficiency in our federal government,” Paul said in a statement.
…
Other agencies that would see massive budget reductions under Paul’s plan include the Department of Homeland Security and its Transportation Security Administration, the Department of Commerce, the federal court system, the Food and Drug Administration, the Centers for Disease Control and Prevention, the Consumer Product Safety Commission, the National Science Foundation and the National Park Service.

Paul’s bill also would privatize the Smithsonian Institution and wipe out federal agencies supporting the arts.

The virtue of the Paul Plan is that it doesn’t just trim, which would only allow for growth next year. Too often cuts that are actually made are simply replaced a few years later, and the government falls once again into financial trouble. By cutting agencies out right, the Paul Plan ensures a more long term financial solvency.

If I see one problem with this plan it is that it actually doesn’t do enough. It certainly demonstrates the depth of America’s financial problems when cutting $500 billion only takes care of 40% of the deficit.

This is, however, exactly the jump start that the US needs to climb out of the hole. And as one commentator said, “Paul is showing that he walks the libertarian walk and talks the libertarian talk”

It clearly makes a difference between the Conservatives and the "coalition"

The federal government has “found” $1 billion in the 2008 budget that has not been spent. The money was designated for a crown corporation that conducts P3 (Public-Private Partnership) projects. This has launched a political debate on what should be done with this “extra” money.

In opposition the Conservative Party was pretty firm on what should be done with surpluses. Either it should go, they said, to paying debt or it should be returned to taxpayers in the form of a tax cut. Given that the Conservative government is in deficit I expect that this money would be drawn into general revenue to make the return to surplus that much easier.

Surely the government wouldn’t be proposing to spend this money? New spending at a time when the country’s finances are in a rocky position is the sort of thing that I would expect from the evil coalition. The Liberal-Socialist-Separatist axis of evil would have used this money in a cynical attempt to buy votes with taxpayer money.

That is why I am glad that a “Conservative” government is in power.

Feds to loosen 'functional food' rules

I've criticized the Conservative government plenty of times on this blog, but here is something positive they are doing: Feds to loosen 'functional food' rules. Basically it is taking food that may not be great for you, but then adding in nutrients of some kind. You'd think this would be preferable than just eating the bad food, but apparently lots of people disagree. From the article in the Toronto Sun:

“The only purpose of adding vitamins and minerals to food is to sell more food,” said Dr. Yoni Freedhoff, an obesity expert with the Bariatric Medical Institute.

I agree Dr. Yoni Freedhoff on the purpose, I just don't see wanting to give customers something they want as a bad thing.

Toronto food writer/blogger Sheryl Kirby not only disagrees with me, she goes further in her letter to Jean-Pierre Blackburn, Minister of State (Agriculture):

Please… MORE restrictions on these companies and the ploys they use to sell people processed foods… not fewer.

I actually don't eat almost any processed food and I certainly don't touch margarine, but why should we stop others from wanting these products? These companies aren't tricking people, if they lie on their package we already have false advertising laws. I dislike the arrogance of people that think they know what other people should eat. I hate the arrogance of people that think the state should go a step further and stop people from eating these things.

Case against menu labelling

Being a foodie and a libertarian, I seem to care about the freedom of eaters and restaurants more than most people. In many jurisdictions, restaurants (typically chains) are forced to show varying degrees of nutritional information on their menus. I think this is a waste of money for the bureaucrats to spend studying and enforcing this, plus on the restaurants that have to comply. A study just came out showing that nutricional information didn't actually affect anything: Study Finds Menu Labeling Didn’t Change Eating Habits.

This makes sense, when people go to typical chain restaurants, they already know they the food isn't healthy. While regulators and activists seem to think that fat people are simply too stupid to realize what makes them fat, the truth is many people know exactly what is making them fat and they still choose to do it (or they aren't unhealthy, and decide to eat at an unhealthy restaurant once and a while). No one walks into a fast food restaurant for the purpose of eating a healthy meal.

I don't think this one law will bankrupt almost any chain with more than 20 locations, but it certainly isn't going to help them either. Apparently, it also doesn't help their customers.

Where did the anti-war movement go?

Has anyone else noticed that the anti-war activists aren't marching now that Obama is president? Can anyone spot a real difference between Bush's and Obama's foreign policy?

Reason Magazine has and Reason Magazine can't:

How Should Governments Respond to Economic Crises?

For an answer check out the Institute for Liberal Studies seminar in Toronto:

21 January · 10:00 - 16:00
University of Toronto - Hart House Music Room

This seminar will examine government actions before and during the Great Depression of the 1930s and the Great Recession of 2008, as well the effectiveness of stimulus spending.

Speakers will include:

George Bragues (University of Guelph Humber)
Steve Horwitz (St. Lawrence University)
Niels Veldhuis (Fraser Institute)

This seminar is free for students and faculty. General registration is just $20. Lunch will be served.

Registration is open at www.LiberalStudies.ca/events.

Positive move on consumer debt

After months of discussion on the dangers of Canada’s high level of consumer/household/private debt, the Government of Canada has decided to change policy. I was initially frightened by this prospect but when the dust settled I became reasonably pleased. The government has done three things to tackle household debt.

1. Reduce the government backing of mortgages and home equity lines of credit.

This is certainly a positive step. It partially removes the moral hazard that is currently infecting our banking system. Banks are free to lend with the knowledge that the government is baring part of the risk. By reducing (note not removing) government backing banks will be more cautious about long term lending.

2. The government will reduce the insurance that Crown Corporation Canada Mortgage and Housing Corporation offers to the lines of credit.

This is positive for much the same reason as the first step, and the two go very much hand in hand. It appears that the government’s strategy is to remove some of the artificial incentives that exist to borrow and lend. That is exactly the right strategy for the government to take.

3. Reducing the maximum amount that individuals can withdraw from refinancing their mortgages.

This is the only policy change that I have an objection to, but my objection is not so much the level that is allowed but the fact that this is regulated at all. Given that it is regulated, I don’t really know what level it is best to be regulated at (how could I and how could anyone?).

Overall I would say that the government is moving in the right direction in mortgage regulation. These are pretty tiny steps towards removing government interference, but any such steps should be applauded.

(It is unfortunate that the goal of these reforms is still being undermined by low interest rates set by the Bank of Canada.)

10 problems and solutions of Obamacare

John Goodman of the National Center for Policy Analyses (US based) has written an interesting blog post about what is wrong with Obamacare and what can be done to fix it. I encourage you to read the whole thing but here is the last two of his ten points:

9. Over-Regulated Patients

Problem: The ACA forces people to spend their premium dollars on first-dollar coverage for a long list of diagnostic tests. Yet if everyone in America takes advantage of all of the free preventative care the ACA promises, family doctors will be spending all their time delivering care to basically healthy people — with no time to do anything else. At the same time, the ACA encourages the healthy to over consume care, it leaves chronic patients trapped in a third-party payment system that is fragmented, uncoordinated, wasteful and designed for everyone other than the patient.

Solution: 1) Instead of dictating deductibles and copayments, give patients greater freedom to save for their own small dollar expenses in health savings accounts, which they own and control; and let them make their own consumption decisions. 2) Allow the chronically ill access to special health accounts, following the example of Medicaid’s highly successful Cash and Counseling program, which allows home-bound, low-income disabled patients to control their own budgets and hire and fire those who provide them with services.

10. Over-Regulated Doctors

Problem: The people in the best position to find ways to reduce costs and increase quality are the nation’s 778,000 doctors. Yet today they are trapped in a payment system virtually dictated by Medicare. The ACA promises to make this problem worse by encouraging even more unhealthy government intervention into the practice of medicine.

Solution: Providers should be free to repackage and reprice their services under Medicare. As long as their proposals reduce costs and raise quality, Medicare should encourage resourceful, innovative attempts to create a better health care system.

How unions cause unemployment

Basically unions hurt anyone who is not in a union, including the poorest members of society.

Alberta's tax on beer geeks

I've written a lot about the ridiculous Ontario liquor laws and wrote my last post on Molson and Labatt trying to raise the Quebec price floor on beer for their own profit. These aren't the only provinces where regular people are inconvenienced by the government and big business.

The Alberta government announced a ban on high alcohol beers (greater than 11.9% alcohol by volume) in early December. The whole logic of this ban was absurd. The general idea was to stop kids from buying the really high alcohol beer to get drunk off of. Even if you agreed with this logic, every single beer over 11.9% alcohol was considerably more expensive per unit of alcohol than pretty much everything on the market other than expensive wine and high end spirits. Taken from a thread on BeerAdvocate.com, here is the list of beers above 11.9% abv available in Alberta:

De Struise Black Albert
Dogfish Head Palo Santo Marron
He'Brew Jewbelation 13
Malheur Brut Noire
Mikkeller Big Worst
Mikkeller Black (Islay Edition)
Mikkeller Black Hole
Samichlaus

My guess is if you aren't a beer geek (like me), you wouldn't have a clue what any of those beers were. However, I would guess the average price in Alberta would be over $10/bottle for these beers. This works out to much more expensive than alternatives to get drunk. Plus, none of these beers are the flavourless lagers that teenagers would be used to drinking. (As an aside, Samichlaus got banned by the Ontario government for the label being appealing to children because the picture looks too much like Santa Claus)

The ban was originally started because of the Scottish brewery BrewDog was trying to get some of their "extreme" beers approved for sale. BrewDog is famous for pushing the boundaries and the buttons of regulators world round (for me to list the ways would be its own post), but all they did in Alberta is try to get beers approved with 41%, 32% and 18% alcohol. The stronger of these bottles would were estimated to sell for at least $85 in Alberta liquor stores. That's a standard 12 ounce bottle. For the same price, you can buy several 26 ounce bottles of whiskey or vodka, which are approximately the same alcohol. I've tried all 3 of these BrewDog beers (were not cheap to get into Ontario!), and I can safely say myself at 16 would not have been able to take more than a sip of any of them.

So after consultation and realizing this ban was pointless to actually protecting a single child from anything, the Alberta government unbanned these beers. However, they put huge new taxes on high alcohol beer.

Beers with alcohol content of 11.9 per cent to 16 per cent will see a $4.05-per-litre mark-up. Beers up to 22 per cent alcohol will see a $9.90-per-litre mark-up and beers up to 60 per cent alcohol will see a $13.30-per-litre mark-up.

So this is literally just a tax on beer geeks. The government doesn't want to admit they made a mistake in the first place by banning the products, so they saved face by adding a tax on them. As these things always go, once you have a commission to study it, of course they will have a solution involving more government. Ironically, given how high these taxes are, I don't even know if the government will get more revenue since it will just move demand beer geek demand to the beers slightly below the arbitrary line of 11.9% alcohol instead of just above the line (which most of these beers are).

Frances Russell versus Maxime Bernier on decentralization

Frances Russell, a columnist at Winnipeg Free Press, has come out in defense of a large and all encompassing central government for Canada’s federation. This is in response, primarily, to Maxime Bernier’s speech where he suggested that provincial governments should be allowed to decide their own health care policy without so much interference from the federal government. His strategy to do this was to change the funding strategy of the Canada Health Act so that the federal government could no longer use health care funding as a stick to beat down provincial innovation.

In the first half of her column Ms. Russell focuses on an ad hominem attack against both M. Bernier and Stephen Harper. Among other things she somehow manages to slip in an accusation that the NCC is racist. I skimmed over this part waiting for her to address her arguments for how power in federal states should be balanced.

Finally she begins her first real argument:

Decentralism and provincial power has been a common refrain from Canada's Right for decades. It doesn't conform to Canadian reality. Unlike the U.S. Constitution, an icon of the modern Canadian Conservative movement, the Canadian constitution awards all residual powers, those powers not specifically assigned to one or the other level of government, to the federal government, not to the provinces.

Putting aside that Oliver Mowat and Wilfrid Laurier (both Liberals) were the original proponents of Provincial Rights, Ms. Russell is absolutely right that residual power resides with the federal government and she defines residual powers accurately.

The problem is that health care is not a residual power. The provincial level of government has been given specific authority over health care. Maxime Bernier’s argument is that we should respect the constitutional authority of provincial governments. Blabbing about residual power is completely irrelevant to that discussion.

Ms. Russells then goes on to say that provincial governments do not have the fiscal power to respond to economic emergencies such as the Great Depression. She accredits supposed failures of Canada’s fiscal system during that period for our modern equalization system.

This is again an odd topic to bring up because it has nothing to do with health transfers. I would be happy to debate the social goals and effectiveness of the equalization system, but this is an entirely separate issue from health care financial transfers. They are negotiated separately and no one to my knowledge is proposing an end to equalization.

In conclusion I can’t help but notice that all of Ms. Russell’s points are completely irrelevant to M. Bernier’s argument. The closest she comes is when she says that the greater fiscal capacity of the federal government allows for more state activism. She accuses of Maxime Bernier of secretly liking decentralization for this reason. This is like accusing a Conservative of being conservative, something that I am usually loath to do.

(As a side note Maxime Bernier has come out against the Conservative Party’s policy of creating a centralized securities system. This brings into question much of Ms. Russell’s assertions about M. Bernier acting as a front man for the real Stephen Harper.)

Loughner isn't a liberal either

Over the past few days conservatives have been rightly outraged by some in the media who are trying to associate Jared Lee Loughner with the “right.” Now Slate is reporting that a Tea Party organization has sent out a fund-raising letter calling Loughner a liberal.

Sigh.

I just don’t get it. The man is so nuts that even conspiracy theorists think he is insane. Can’t we all just agree that he is a crazy man and stop trying to apply any particular political label? Why are we so obsessed that the answer “he did it because he is nuts” is just not enough for us?

Jared Lee Loughner is not a liberal, socialist, conservative, libertarian, or anything else with any coherent philosophy. He is simply insane.

Violent political rhetoric

Violent metaphors are so common in politics that I think that most of us don’t even notice them, but lately they have been getting a lot of attention. Some are claiming that these metaphors have contributed to the motivation of a lunatic that tried to assassinate a United States Congressman. Terrance Watson correctly points out that the only people giving specific blame for the rhetoric are partisan knobs of the highest degree, but should we take seriously the idea that violent rhetoric leads to violence?

A Hill Times article (published two days after the shooting) serves as an interesting example. The article is laced with violent rhetoric that is used both by the author and the people interviewed. Here is one example (emphasis added):

Liberals told The Hill Times they have recruited one of the party's best-known organizers and campaign talents in the GTA, former federal health minister Elinor Caplan, as part of their response to Mr. Harper's (Calgary Southwest, Alta.) assault on the Liberal fortress.

Is the image of Conservative troops storming a Liberal fortress not violent enough for you? Then how about a metaphor that references mass killings? (emphasis added):

A prominent Conservative commentator dismissed the image of Mr. Harper perched in a pre-campaign mode, telling voters the last thing he wants this spring is an election, while in reality ready to pounce if bloodletting begins in the Liberal Party.

Here is another example that was given in a quote from Conservative strategist Tim Powers (emphasis added):

Surely the surest thing to unite Liberals is to have Tories firing at them for their own incompetence. Don't interrupt the enemy when he's in the middle of shooting himself.

The violence implied in each of these examples is pretty harmless. I doubt that I would have even noted them as violent if I hadn’t been thinking about this topic. They do exactly what metaphors are meant to do, add colour and clarify meaning.

After reading such violent metaphors I do not feel anymore violent towards those that I disagree with, and I very much doubt that anyone who is mentally stable would either. In fact that is the main point here; the standard should not be what would a lunatic do, it should be what a sane person would do.

No sane person would see a poster with a target on a politician and think that they should assassinate him/her. At the same time guessing at what an insane person would do is almost impossible. Jared Lee Loughner might have gotten the idea to play assassin by watching Bambi, who knows and ultimately who cares? Society at large should not be held hostage by what an insane person might take inspiration from.

Big brewers for price floors

There is a common myth that big business supports free market policies and that proponents of the free market support big business. This is true in some cases, but big business typically supports policies that help themselves out, regardless if it means markets are more or less free. This article in the National Post shows a case where the two biggest breweries in the world, Molson Coors Brewing Co. and AB Inbev unit Labatt, are trying to get government to make the industry less free by raising the price floor on beer in Quebec. Read the article here: Quebec brewers in froth over cheap beer.

Of course Molson and Labatt (the Canadian divisions of the foreign owned brewing giants) are arguing for this based on the hard to define concept of "social responsibility":

“The reason why we have a minimum price at all is for social reasons,” said Molson spokesperson Marie-Hélène Lagacé. “And we fear that if the price of beer as an industry rises lower than the price of milk or butter, we have a social issue,” namely irresponsible consumption.

In reality, Molson and Labatt have a huge financial incentive for government mandated price floors for two reasons:

1) The price floor helps prevent competition from discount brewers that make similar adjunct lagers. This hurts the smaller business because they are unable to compete on price. When you have similar products and a lower marketing budget, how can a discount brewery possibly compete and try to gain any market share?

2) The bigger reason is that the price floor essentially means Molson and Labatt do not have to get into price wars with each other. They can both price their products well above the market price, knowing their main competitor won't be able to undercut them. If they were to come to this agreement themselves, it would be collusion.

So why wouldn't Molson and Labatt want the price floor? They have less competition and the government allows them to legally collude with their only major competitor. This hurts the consumer because we have to pay more, while getting less selection. Hopefully Jean Charest sides with the people of Quebec over big business and rejects this request.

For Tim Hudak, the winning issue is also the right issue

Ontario Progressive Conservative leader Tim Hudak is taking exactly the right tact by taking on the Liberal government’s out of control spending. The words “out of control spending” are thrown around a lot, but in this case it truly applies. According to a National Post article:

Overall, annual government spending has risen 68.5%, to $125.6-billion since the Liberals took office in 2003. The province's net debt, meanwhile, has increased 51% since that date. It now stands at $219.5-billion, or $16,612 for every man, woman and child.

Mr. Hudak says that he will cut back on this spending and that cuts would target corporate welfare, obscure government agencies, and overly generous public sector contracts. It is doubtful that enough could be done in these categories alone to fix the fiscal mess, but it is an excellent start.

Ontario’s disastrous fiscal situation is the provinces largest public policy problem. It is also the topic that the Liberal Party would like to discuss the least. It is most certainly a losing issue for the government and they seem to be unable to come up with an effective response.

The Minister of Infrastructure Bob Chiarelli seems to have been given the job of responding to Mr. Hudak’s pledge to cut taxes. This is what he has said:

“Virtually every political leader in Canada supported the idea of deficit spending except essentially one — and that was Tim Hudak,” he said.

This counter attack is so weak that it is actually a compliment. Basically what the Minister is saying is that Mr. Hudak has been consistent on this issue. Even when all others were saying something different he stood up for what he thought was right. I just don’t see how this is going to make him less appealing to Ontarians.

Mr. Chiarelli also said that the PC Party can’t attack the government on this issue because they don’t have a plan to tackle it. This is such a common tactic of governments everywhere that you may feel free to roll your eyes. Of course the opposition can’t produce a complete fiscal plan. Unlike the government, they don’t have thousands of civil servants to help them do it.

Besides the PC Party is actually in the middle of a policy process that will be completed well ahead of the election, so the people of Ontario will likely (hopefully) be given ample time to get a good idea of what a PC government would do. Even without this process completed Tim Hudak is already giving the people of the province an idea of what he thinks should be cut back on. The claim that Mr. Hudak can’t attack the government because he doesn’t have a plan of his own is thus pretty silly even if it wasn’t immaterial.

The province of Ontario needs a radical change in its fiscal structure, and Tim Hudak might just be able to become premier promising to make that change. It is rare that a winning issue is also the most important issue, but when it happens it can be a beautiful thing.

Hudak to cut government spending?

Tim Hudak is starting to talk about spending cuts. That's great news! The McGuinty's government has rung up huge deficits from a provincial budget that previously had surpluses, which is a clear sign of fiscal mismanagement. The article in The Star, and seemingly Hudak, is light on specifics, but the closest to specifics mentioned were:

Hudak also said he would scrap “corporate giveaways,” like the $437 million subsidy over 25 years to South Korea’s Samsung to manufacture wind and solar energy equipment in Ontario.

Perhaps most contentiously, he said public sector unions would have to shoulder some of the burden because “collective bargaining agreements need to reflect the ability of families to pay the bills.

If Hudak runs on a platform with issues such as this in the 2011 election, I'll be incredibly happy. I hope specifics of other spending cuts will be coming out as the October election approaches.

Hayek in the Globe and Mail

Throughout the economic crisis the ideas of F.A. Hayek have been completely ignored. Proponents of the Austrian School of Economics barely even got a whisper into the public debate around how government should react. Anyone who did speak out against stimulus plans, citing Hayek, were dismissed as loonies.

A Globe and Mail column points out that Hayek’s ideas are finally on the rise. Furthermore the Globe and Mail predicts that Hayek and his perspective will be a major theme in 2011.

That is the Globe and Mail.

Not the National Post.

Not the Calgary Herald.

But the freaking Globe and Mail.

If even the middle of the road G&M is giving credence to Austrian perspectives then perhaps Keynes has not had the last laugh yet. With the global economy collapsing in debt, perhaps now is the time that people are ready to listen to alternatives.

The coming end to government liquor stores?

Ontario is not the only jurisdiction in North America that operates government ran liquor stores, but there is a real movement in the United States to put away this last vesper of prohibition.

This from Reason Magazine:

The states where wine (and beer) can be purchased along with groceries include Virginia, North Carolina, and Washington, which nevertheless confine the sale of distilled spirits to government stores. This year legislators in all three states are considering abolishing that monopoly, with support from the governor in the first two and possibly in the third as well.

The opposition to these proposals comes from labor unions representing state liquor store workers, anti-alcohol groups such as Mothers Against Drunk Driving, and businesses that profit from the lack of competition. In Washington last year, beer and wine companies were the biggest donors to the campaigns against two unsuccessful ballot initiatives that would have privatized sales of distilled spirits.

What all these special interests have in common is a disdain for consumers—which is fitting, because that is the inescapable rationale for state alcohol monopolies.

Let’s hope that advocates for consumers are victorious in the US, and let’s hope that their victory spreads to Ontario.

End US Border Protectionism

I was going to post something about this soon (I flew into Canada from the US yesterday), but then I saw this from the Fraser Institute today: End penny-pinching protectionism at the border

If Canada’s (mostly) free trade Conservative government wishes to persuade more consumers about the virtues and benefits of free trade, give them the non-punitive experience of choice between U.S. and Canadian retailers—that, and a more pleasant, hassle-free experience at the border.

Read the whole thing because Mark Milke is a better writer than I am, so I won't completely restate his case.

I just wanted to add that I think it is absurd that we have mostly free trade for businesses, but not for individuals trying to cross the border. I actually find it easier to get into the United States for travel than to come back into the country that I am a citizen of, which strikes me as odd. The Canadian government can either remove the duty on non-commercial shopping or at least expand the personal allowances. I'm sure the lost revenue from charging people small amounts for going a bit over the limit would be more than made up for by not requiring as many guards. It would also make the border crossings quicker for both personal and commercial travel.

News Flash! Your boss makes more than you

The Centre for Policy Alternatives is trying to, once again, manufacture outrage over how much the top CEOs get paid. Frankly I don’t think there is a person alive today that would be shocked that the top 100 CEOs are paid a lot more than the average person (note that they do not look at all CEOs only the top 100). The shock value of learning that they get paid a lot more than I do is pretty low.

I don’t really know if the top 100 CEOs are over paid or not, but at least someone must find their skills valuable enough to pay an average of $6.64 million. A business wants to make a lot of money and any competent board of directors would not allow such a huge amount of money to be spent on one salary if they didn’t think it was worth it. The skills needed to be a CEO is unique and specialized enough that it calls for a high salary.

Hugh Mackenzie, the representative of the CPA, does not concede this argument:

The typical explanation — that companies need to offer their chief executive millions in order to attract, keep and motivate a suitable leader — doesn’t hold water, Mackenzie said.

“You could ask how motivating is it for the average employee, who is actually the person who generates the income for the corporation, to see that their CEO is making 300 times what they are. I would think that would be kind of demotivating.”

The above statement wants me to rip my hair out for a couple of reasons.

First I do not find it “demotivating” that my boss makes more money than me. I find it motivating because it makes me want to be so good at my job that one day I will get his job. If he was paid the same as me I wouldn’t want his job and I would only work as hard as I had to for my employer not to fire me.

Second is the assumption inherent in claiming that it is the “average employee who is actually the person who generates the income for the corporation.” This a Marxist economic concept that has been debunked so many times that I doubt even many Marxists still believe in it. A CEO of a company is not a leech off the workers; the manager of a company does add economic value to the company.

I think part of Mr. Mackenzie’s problem is that he doesn’t seem to actually understand what a CEO does. Really I don’t understand what a CEO does either. Do you? Does Mr. Mackenzie imagine that the average CEO spends his day drinking scotch in his office laughing at all the poor people?

You know what, forget it. Even if he does know exactly what a CEO does it still wouldn’t make his complaint valid. Just because Mr. Mackenzie doesn’t value the skills needed to be a CEO doesn’t mean that no one should.

I think that it is absurd that people are paid millions of dollars just because they are proficient at hitting a ball with a stick. It would be arrogant of me to say that they shouldn’t be paid so much, just as it is arrogant of Mr. Mackenzie.

Getting a job in politics

I have met many people like this woman.



If you honestly want a job in politics. Then do what the guy in the video says. Volunteer and do the grunt work. Trust me, politicians(and more importantly the politician's senior staff) are far more impressed by someone who will knock on a thousand doors then by someone who can pretend what a slight change in polling data means.