Posts
This makes sense:
And most of the arguments can apply to Canada too.
Wednesday, November 30, 2011
Government fails and the Happy Meal lives on
Government regulators are all too often convinced that they know how we as individuals should live our lives and raise our children. At the same time most regulators are incredibly incompetent at getting people to do what they want.
Take this recent case in San Francisco as an example:
I remember loving Happy Meals as a child, but I don’t have any recollection of ever caring much about the crappy toys. At best I would play with the Happy Meal toys in the car ride home. If the toys didn’t come with the meals I don’t think I would have even noticed.
I suspect that I am not unique in this. Some children may have cared about the toys more than me, but I really doubt that many children liked the Happy Meals for the toys. The Happy Meals were good in of them selves. So the whole concept of stopping child obesity by forbidding toys be sold with unhealthy food is pretty much guaranteed to have a nil effect.
The fact that the policy failed even to stop the toys being sold with the meals is just icing on the cake.
Take this recent case in San Francisco as an example:
In order to include a toy with a meal, restaurants must now comply with city-generated nutritional standards. Those are standards that even the "healthier" Happy Meals McDonald's introduced earlier this year don't come close to meeting. (As SF Weekly noted in January, the school lunches our children eat aren't healthy enough to qualify, either).It isn’t so much that they failed to force McDonald’s not to offer toys along with Happy Meals, that is funny enough but what really tickles me about this is how stupid the original premise is.
And yet it seems McDonald's has turned lemons into lemonade -- and is selling the sugary drink to San Francisco's children. Local McDonald's employees tell SF Weekly the company has devised a solution that appears to comply with San Francisco's "Healthy Meal Incentive Ordinance" that could actually make the company more money -- and necessitate toy-happy youngsters to buy more Happy Meals.
It turns out San Francisco has not entirely vanquished the Happy Meal as we know it. Come Dec. 1, you can still buy the Happy Meal. But it doesn't come with a toy. For that, you'll have to pay an extra 10 cents.
I remember loving Happy Meals as a child, but I don’t have any recollection of ever caring much about the crappy toys. At best I would play with the Happy Meal toys in the car ride home. If the toys didn’t come with the meals I don’t think I would have even noticed.
I suspect that I am not unique in this. Some children may have cared about the toys more than me, but I really doubt that many children liked the Happy Meals for the toys. The Happy Meals were good in of them selves. So the whole concept of stopping child obesity by forbidding toys be sold with unhealthy food is pretty much guaranteed to have a nil effect.
The fact that the policy failed even to stop the toys being sold with the meals is just icing on the cake.
Tuesday, November 29, 2011
Milton Friedman on taxing the rich and government failure
His ability to go straight to the heart of an issue is truly amazing. As good of an economist as he was, his true greatness was his ability to communicate.
Excercising is not a risk free investment
In response to a survey that says Canadians don’t feel they have the time to work out, the Heart and Stroke Foundation of Canada seems to want people to view exercise as an investment. If you spend time working out you will ultimately gain more time by living longer. Like any investment, however, this is not without risk.
This is the basic calculation that the HSFC wants us to make:
On the surface this looks like a good deal. Working out 150 minutes a week from the age of 20 and 80 amounts to a little less of a year in total and for that you get an extra 4 years of life. If only my other investments could match such a return.
Of course the 4 years claim is likely based on actuary data which means that it is an average over the general population. For you as an individual the results are far more variable than the claim would have you believe. After all there are other factors at work besides exercising. Genetics and other environmental factors play an important role. It is possible that you work out religiously from a young age and still die of a heart disease at the age of 50.
Furthermore there are a lot of other things you can die of. You don’t get any return on your investment if you get hit by a car and break your neck.
I don’t say this to imply that exercise is not worth the time or effort. I merely point out that the long term benefits might not be worth the time or effort (personally I put greater stock in the short term benefits of exercise). It probably is worth it but we should understand that there is what economists call a knowledge problem; as an individual I don’t know how beneficial exercise will be for me.
This is important to keep in mind because too often governments make policies on the misguided notion that encouraging people to exercise would be universally beneficial. Governments should allow individuals to make their own choices and take their own risks.
This is the basic calculation that the HSFC wants us to make:
This includes getting 150 minutes per week of moderate to vigorous exercise, which the foundation said can reduce the risk of heart disease, stroke, high blood pressure and diabetes by 30 per cent. On the other hand, inactivity can shave four years off a person's lifespan, it said.
On the surface this looks like a good deal. Working out 150 minutes a week from the age of 20 and 80 amounts to a little less of a year in total and for that you get an extra 4 years of life. If only my other investments could match such a return.
Of course the 4 years claim is likely based on actuary data which means that it is an average over the general population. For you as an individual the results are far more variable than the claim would have you believe. After all there are other factors at work besides exercising. Genetics and other environmental factors play an important role. It is possible that you work out religiously from a young age and still die of a heart disease at the age of 50.
Furthermore there are a lot of other things you can die of. You don’t get any return on your investment if you get hit by a car and break your neck.
I don’t say this to imply that exercise is not worth the time or effort. I merely point out that the long term benefits might not be worth the time or effort (personally I put greater stock in the short term benefits of exercise). It probably is worth it but we should understand that there is what economists call a knowledge problem; as an individual I don’t know how beneficial exercise will be for me.
This is important to keep in mind because too often governments make policies on the misguided notion that encouraging people to exercise would be universally beneficial. Governments should allow individuals to make their own choices and take their own risks.
Just wait until we get a majority! (Part 7)
I am sick of this minority parliament. I'm sure it is the opposition coalition of the Liberals, socialists and separatists are forcing Harper to make decisions like this: Minister of Agriculture defends protectionist policies in the poultry and milk industries. We need a stable majority government so that we can start standing up for free trade.
Friday, November 25, 2011
Marijuana problem: Parents do want it legal
Kelly Egan authored a column in the Ottawa Citizen that claims that “ordinary people” don’t want pot legalized. I suppose it Egan world “ordinary” is the minority of people because fifty-three per cent of people do want it legalized. I’m pretty sure that 1 or 2 of that fifty-three per cent are parents, and so I feel comfortable saying that at least some parents want it legalized.
That’s not good enough for Ms. Egan. You see, she has “eyes” and her “eyes” tell her that at least one parent doesn’t want it legal, and of course that means that no parents want it legal.
You know all that academic evidence that prohibition is bad for individuals and society? That doesn’t matter!
My parents wouldn’t buy me alcohol when I was a teenager, therefore alcohol should be prohibited by the state. Try to parse that as a logical argument if you dare.
That’s not good enough for Ms. Egan. You see, she has “eyes” and her “eyes” tell her that at least one parent doesn’t want it legal, and of course that means that no parents want it legal.
You know all that academic evidence that prohibition is bad for individuals and society? That doesn’t matter!
Ordinary people are not going to read academic studies, unravel complex science on addictions or solve a harm benefit equation.
They are probably going to ask themselves: Would you buy a bag of weed and give it to your teenager?
My parents wouldn’t buy me alcohol when I was a teenager, therefore alcohol should be prohibited by the state. Try to parse that as a logical argument if you dare.
Thursday, November 24, 2011
Freedom of Religion should not be in our constitution
Federal Court Judge Michel Shore dismissed Christopher Bennett’s claim that, for him, marijuana is a holy sacrament and thus him smoking it is protected under the Charter as a freedom of religion. Judge Shore said that Mr. Bennett’s pot smoking is a “life style choice.” Yes it is a life style choice, but so are all religions.
A person must decide to belong to a religion. Even if they are born into that religion they are still given a choice at some point in their life (at least in this society). Some religions require a very strict commitment and others are more liberal, but there is no religion in the world that doesn’t come with a particular life style. This makes being a member of a religion a life style choice, the same as being a pot head or being a hipster is a life style choice.
So why would being religious be a life style that is particularly protected?
At least on the surface it would appear that belonging to a particular religion is the choice that has led to the most discrimination in history. It wasn’t until the early 19th century that the British allowed Catholics to be public employees and it doesn’t take much education to think of much more horrific discriminations based on religion. There is, however, another life style choice that has been more consistently discriminated against than belonging to any religion, and that is atheism.
It wasn’t until very recently that someone could be an atheist openly and not fear public ire at best and horrible death at worst. Yet we have no specific protection for atheists beyond the normal protection of freedom of expression.
There are other less notable examples that also don’t receive special comment in the constitution. For example, at a certain time in Russian history bearded men were legally discriminated against. There is no provision anywhere in the charter that assures beard growers that this will never happen in Canada, besides of course the same assurance that the baby faced among us have in the section referring to the freedom of expression.
It is puzzling to me why, if freedom of expression is enough to protect atheists and beards, the choice of religion would need special mention. If the purpose of the constitution is to ensure that people can live their lives as they wish (within reasonable limits) then why does one particular set of choices need extra protection? Why should the individual’s reason behind the choices he/she make have any significance?
In a truly free society Mr. Bennett should not have had to justify his life through religion. All he should have had to say is “it is my choice and I am not hurting anyone.” Case shut.
A person must decide to belong to a religion. Even if they are born into that religion they are still given a choice at some point in their life (at least in this society). Some religions require a very strict commitment and others are more liberal, but there is no religion in the world that doesn’t come with a particular life style. This makes being a member of a religion a life style choice, the same as being a pot head or being a hipster is a life style choice.
So why would being religious be a life style that is particularly protected?
At least on the surface it would appear that belonging to a particular religion is the choice that has led to the most discrimination in history. It wasn’t until the early 19th century that the British allowed Catholics to be public employees and it doesn’t take much education to think of much more horrific discriminations based on religion. There is, however, another life style choice that has been more consistently discriminated against than belonging to any religion, and that is atheism.
It wasn’t until very recently that someone could be an atheist openly and not fear public ire at best and horrible death at worst. Yet we have no specific protection for atheists beyond the normal protection of freedom of expression.
There are other less notable examples that also don’t receive special comment in the constitution. For example, at a certain time in Russian history bearded men were legally discriminated against. There is no provision anywhere in the charter that assures beard growers that this will never happen in Canada, besides of course the same assurance that the baby faced among us have in the section referring to the freedom of expression.
It is puzzling to me why, if freedom of expression is enough to protect atheists and beards, the choice of religion would need special mention. If the purpose of the constitution is to ensure that people can live their lives as they wish (within reasonable limits) then why does one particular set of choices need extra protection? Why should the individual’s reason behind the choices he/she make have any significance?
In a truly free society Mr. Bennett should not have had to justify his life through religion. All he should have had to say is “it is my choice and I am not hurting anyone.” Case shut.
Friday, November 18, 2011
3 Reasons we shouldn't bail out student loans
We should as a society decide if we can treat an 18 year old as an adult or not. If they are an adult then they live with the consequences that adults must live with.
CD Howe fiddles while Canada's health care system burns
Don Drummond, through the CD Howe Institute, has recently published a paper on Canada’s Health Care system. It is an interesting piece of work. The interest is not so much because of the conclusions it reaches, there isn’t much there that’s new or innovative, but because it is an example of what is wrong with the health care policy debate in Canada. There is a blatant and conscience effort to avoid discussing changes that can be made to the single/public-payer model. That is to say, no one wants to talk about private financing in Canada’s health care system.
The report itself is an effort to come up with ways that health care spending could be reduced without touching the financing of health care. Mr. Drummond discusses creating incentives that will reduce overuse on the part of the patients and encourage efficiency from suppliers. He suggests that fees to providers should constantly be reviewed to reflect innovations and cost changes. He wants funding to shift from one area of health care to another where he believes that demand is rising.
Throughout the whole paper he completely ignores the fact that there already exists a method that would accomplish all of this in one shot: price signals.
Price signals allows for the consumers to act as if they know without actually knowing how much supply there is available of a good. Price signals encourage providers to adjust to changes in demand and the accompanying profit motive gives them an incentive to be more efficient. Price signals will do everything that Mr. Drummond wants done, but he won’t even talk about it, because for price signals to work private financing would have to be introduced to the system.
To the CD Howe Institute’s credit they are pretty blunt about why they won’t talk about financing. The president of the Institute writes that changing the financing “would be so politically inflammatory as to block reforms.” What he means is that he is too afraid of a public backlash to speak truth to power.
The truth is that governments can fiddle with the administration of the public funded system all they want but all they are doing at best is kicking the can down the road.
The single/public-payer model is at the core of the unsustainability of Canada’s health care system. It is the inability to solve basic knowledge problems of supply and demand through the price signals that creates waste and inefficiency. A central planner simply cannot mover fast enough nor can it know enough to replace prices as a solution.
The public is not being well served by respected academics like Don Drummond refusing to talk about this issue. The health care debate in this country is incredibly incomplete, with only a few individuals or organizations, like the Fraser Institute, willing to address it. Fear of the public not liking what it hears is no excuse. Real change does not happen from following a crowd but by leading it.
The report itself is an effort to come up with ways that health care spending could be reduced without touching the financing of health care. Mr. Drummond discusses creating incentives that will reduce overuse on the part of the patients and encourage efficiency from suppliers. He suggests that fees to providers should constantly be reviewed to reflect innovations and cost changes. He wants funding to shift from one area of health care to another where he believes that demand is rising.
Throughout the whole paper he completely ignores the fact that there already exists a method that would accomplish all of this in one shot: price signals.
Price signals allows for the consumers to act as if they know without actually knowing how much supply there is available of a good. Price signals encourage providers to adjust to changes in demand and the accompanying profit motive gives them an incentive to be more efficient. Price signals will do everything that Mr. Drummond wants done, but he won’t even talk about it, because for price signals to work private financing would have to be introduced to the system.
To the CD Howe Institute’s credit they are pretty blunt about why they won’t talk about financing. The president of the Institute writes that changing the financing “would be so politically inflammatory as to block reforms.” What he means is that he is too afraid of a public backlash to speak truth to power.
The truth is that governments can fiddle with the administration of the public funded system all they want but all they are doing at best is kicking the can down the road.
The single/public-payer model is at the core of the unsustainability of Canada’s health care system. It is the inability to solve basic knowledge problems of supply and demand through the price signals that creates waste and inefficiency. A central planner simply cannot mover fast enough nor can it know enough to replace prices as a solution.
The public is not being well served by respected academics like Don Drummond refusing to talk about this issue. The health care debate in this country is incredibly incomplete, with only a few individuals or organizations, like the Fraser Institute, willing to address it. Fear of the public not liking what it hears is no excuse. Real change does not happen from following a crowd but by leading it.
Thursday, November 17, 2011
Federal government's pension proposal is better than CPP expansion
The federal government is set to announce today a new method for Canadians to save and invest for their retirement. I am unsure about the details of this plan and I imagine that I could easily find something objectionable about it once I learn the details, but it is already clear that it is better than the alternative. There has been pressure on the government to increase CPP payments, and that would have certainly been a bad idea.
First of all the claim that the CPP is cheaper to manage than a private firm is at the very least exaggerated but could also be simply false. The claim is based on the administration costs of the CPPIB (Canadian Pension Plan Investment Board) versus the usual costs of a private investment firm. The problem is that the operational budget of the CPPIB does not cover all the costs that private firms face. These costs are carried by other government agencies (such as Revenue Canada), so the straight one on one comparison is false.
Secondly and more importantly, the proposed plan is another voluntary method rather than government mandated. Putting aside the morality of forcing people to invest in something that they don’t want to invest in, it disadvantages some individuals. In general it is a good thing for people to invest in retirement, but there can be pretty compelling reasons why that money is needed more immediately (or perhaps needed for another long term project such as a new business). By allowing the individual to choice we are allowing them to set their own priorities and not disadvantaging those that wish or need to do something else with that money.
Thirdly CPP is not the safe investment that its proponents claim. It has the same disadvantage of any defined benefits plan. It is possible if not likely that the liabilities will outstrip the contributions. At which point it becomes unlikely that younger investors will get their full return. Also it is subject to the whims of governments that might change the contribution levels or benefits at will.
Fourth and finally, the CPPIB is about at the end of its effectiveness as an investment manager. Neil Mohindra of the Fraser Institute released a study a few months back that looked at the literature on the diseconomies of scale for investment managers. The study demonstrated that there are several disadvantages to having a too large money pool. These disadvantages can be offset in limited ways by various practices but the CPPIB has already put these methods into place. The return of an enlarged investment into the CPP is very likely to be minuscule because the diseconomies of scale would be too great.
The government’s new plan would have to be pretty awful to be worse than the disadvantages I have just mentioned. So even if it is not perfect, and I am sure that it will not be, I am confident that it will be the better of the two policy options.
First of all the claim that the CPP is cheaper to manage than a private firm is at the very least exaggerated but could also be simply false. The claim is based on the administration costs of the CPPIB (Canadian Pension Plan Investment Board) versus the usual costs of a private investment firm. The problem is that the operational budget of the CPPIB does not cover all the costs that private firms face. These costs are carried by other government agencies (such as Revenue Canada), so the straight one on one comparison is false.
Secondly and more importantly, the proposed plan is another voluntary method rather than government mandated. Putting aside the morality of forcing people to invest in something that they don’t want to invest in, it disadvantages some individuals. In general it is a good thing for people to invest in retirement, but there can be pretty compelling reasons why that money is needed more immediately (or perhaps needed for another long term project such as a new business). By allowing the individual to choice we are allowing them to set their own priorities and not disadvantaging those that wish or need to do something else with that money.
Thirdly CPP is not the safe investment that its proponents claim. It has the same disadvantage of any defined benefits plan. It is possible if not likely that the liabilities will outstrip the contributions. At which point it becomes unlikely that younger investors will get their full return. Also it is subject to the whims of governments that might change the contribution levels or benefits at will.
Fourth and finally, the CPPIB is about at the end of its effectiveness as an investment manager. Neil Mohindra of the Fraser Institute released a study a few months back that looked at the literature on the diseconomies of scale for investment managers. The study demonstrated that there are several disadvantages to having a too large money pool. These disadvantages can be offset in limited ways by various practices but the CPPIB has already put these methods into place. The return of an enlarged investment into the CPP is very likely to be minuscule because the diseconomies of scale would be too great.
The government’s new plan would have to be pretty awful to be worse than the disadvantages I have just mentioned. So even if it is not perfect, and I am sure that it will not be, I am confident that it will be the better of the two policy options.
Wednesday, November 16, 2011
Occupy Toronto has no right to St. James Park
On Tuesday the City of Toronto issued eviction notices to the Occupiers at St. James Park, I am sure in response to my post on Monday. A group of the Occupiers went to a judge for an injunction claiming that the eviction would violate their charter rights. The judge put a stay on the enforcement of the eviction notices until he had heard the arguments on Friday. This puzzles me.
I am not a lawyer. I have zero legal training, but I believe that I have a reasonable grasp on the constitution for a layman. I would have thought that this would be a pretty open and shut case. Isn’t it pretty well established that in Canada if you want to protest on public ground you need a permit? I hadn’t thought that this was a controversial limit on free speech.
As I say I am not an expert on constitutional law, but that doesn’t really matter because regardless of what the judge decides this is a reasonable limit on free speech and the Occupiers should be removed.
Lorne Gunter put it pretty well in his column published earlier today:
It is a key point that the Occupiers are restricting the ability of others to use the public space. This restriction is a cost that the rest of the public who may wish to use the park must pay. At the same time the Occupiers are completely ignoring the usual method of assigning usage of this public good. Essentially the Occupiers, by claiming exclusive use of the park, are demanding a public subsidy for their free speech.
Here we come to one of the misunderstood aspects of the right to speech and peaceful assembly. For it to be truly peaceful you cannot force others to pay for it. Magazine owners do not have a responsibility to publish everything that is submitted to them. I am not obligated to listen to every speaker with equal attention. And no one has an exclusive claim on a public good for the purposes of voicing an opinion.
The people presently squatting at St. James Park have the right to say and believe what they like, but that right does not allow them to continue to squat on public land.
I am not a lawyer. I have zero legal training, but I believe that I have a reasonable grasp on the constitution for a layman. I would have thought that this would be a pretty open and shut case. Isn’t it pretty well established that in Canada if you want to protest on public ground you need a permit? I hadn’t thought that this was a controversial limit on free speech.
As I say I am not an expert on constitutional law, but that doesn’t really matter because regardless of what the judge decides this is a reasonable limit on free speech and the Occupiers should be removed.
Lorne Gunter put it pretty well in his column published earlier today:
You don't have an unreserved right to live in a public space, no matter how fervent your opinions are nor how noble you believe your cause is. Your actions diminish the ability of other citizens to enjoy that public space, too. By demanding that you be permitted to camp out in a city park until income parity is reached or caps to CEO pay are legislated or the dictatorship of the proletariat is achieved, you are, effectively, insisting your rights trump those of other members of the public who may wish to use the common space differently. What gives you that right?
It is a key point that the Occupiers are restricting the ability of others to use the public space. This restriction is a cost that the rest of the public who may wish to use the park must pay. At the same time the Occupiers are completely ignoring the usual method of assigning usage of this public good. Essentially the Occupiers, by claiming exclusive use of the park, are demanding a public subsidy for their free speech.
Here we come to one of the misunderstood aspects of the right to speech and peaceful assembly. For it to be truly peaceful you cannot force others to pay for it. Magazine owners do not have a responsibility to publish everything that is submitted to them. I am not obligated to listen to every speaker with equal attention. And no one has an exclusive claim on a public good for the purposes of voicing an opinion.
The people presently squatting at St. James Park have the right to say and believe what they like, but that right does not allow them to continue to squat on public land.
Tuesday, November 15, 2011
Giving up agriculture supply management to join free trade group
So let me get this straight. In order to join the Trans-Pacific Partnership free trade group Canada will have to agree to stop a policy that makes common foods more expensive. I think this has to be the very definition of win-win.
Of course the caveat is that Canada won't have to eliminate supply management immediately. It seems likely that they will be on a "liberalization schedule." Which is diplomatic speech for you don't ever have to really do that. But still it will at least create one pressure to encourage liberalization that will counter the special interest groups that try to stop it.
Of course the caveat is that Canada won't have to eliminate supply management immediately. It seems likely that they will be on a "liberalization schedule." Which is diplomatic speech for you don't ever have to really do that. But still it will at least create one pressure to encourage liberalization that will counter the special interest groups that try to stop it.
Monday, November 14, 2011
Note to Rob Ford: either deal with Occupy Toronto, or shutup
For a week or so I have been reading articles like this one where Rob Ford says that the Occupation at St. James Park is illegal and at some point the law will be enforced. When asked at what point the law will be enforced he says that it will be soon. Then he claims that they will likely go away by themselves anyway.
I understand Mr. Ford’s dilemma. It is the same problem facing every municipal leader that is unfortunate enough to have to deal with one of these Occupation protests. They are clearly committing a crime by squatting on public land, but if police are sent in to enforce the law the situation will be uncontrollable by the elected officials. Regardless of how much blame the mayor actually deserves, it is guaranteed that if violence ensues the mayor will be blamed.
The problem is that by saying the police will eventually be sent in but not saying when, Rob Ford is likely breathing life into the protesters.
Many of the protesters already despise Rob Ford (if their signs are any indication), so by being critical of the protest Rob Ford is setting him up to be the perfect vocal point of the Occupiers. Rob Ford is providing an enemy that is not abstract. He could become the embodiment of the great evil power that must be defied.
At the same time by not actually doing anything about it, Rob Ford is making it appear that defiance is not just possible, it is easy.
“I can have all the fun of standing up to the man (i.e. Rob Ford),” thinks one inclined to join the protest, “but without actually having to risk a baton to the head or a night in jail.”
Rob Ford needs to stop pussyfooting around and either be the man of action we all thought he was, or stop saying anything on the issue at all.
I understand Mr. Ford’s dilemma. It is the same problem facing every municipal leader that is unfortunate enough to have to deal with one of these Occupation protests. They are clearly committing a crime by squatting on public land, but if police are sent in to enforce the law the situation will be uncontrollable by the elected officials. Regardless of how much blame the mayor actually deserves, it is guaranteed that if violence ensues the mayor will be blamed.
The problem is that by saying the police will eventually be sent in but not saying when, Rob Ford is likely breathing life into the protesters.
Many of the protesters already despise Rob Ford (if their signs are any indication), so by being critical of the protest Rob Ford is setting him up to be the perfect vocal point of the Occupiers. Rob Ford is providing an enemy that is not abstract. He could become the embodiment of the great evil power that must be defied.
At the same time by not actually doing anything about it, Rob Ford is making it appear that defiance is not just possible, it is easy.
“I can have all the fun of standing up to the man (i.e. Rob Ford),” thinks one inclined to join the protest, “but without actually having to risk a baton to the head or a night in jail.”
Rob Ford needs to stop pussyfooting around and either be the man of action we all thought he was, or stop saying anything on the issue at all.
Thursday, November 10, 2011
More corporate welfare in the UK
UK Prime Minister David Cameron has announced today that he will be spending an additional £95 million in corporate welfare. This will apparently create more jobs and grow small and medium businesses (presumably if this program is really successful these businesses will become large and thus will no longer qualify for government support).
It just baffles me why the argument that government doesn’t efficiently allocate capital continues to fall on deaf ears.
It just baffles me why the argument that government doesn’t efficiently allocate capital continues to fall on deaf ears.
Wednesday, November 9, 2011
The new Ontario minority Parliament may turn out alright
This article from the Toronto Star has given me the clearest vision, thus far, on how the new Liberal minority government can be made to work for the benefit of Ontarians.
Tim Hudak is pushing for the government to make some cuts and the Liberal government appears to be agreeing to work with the PC Party to bring forward such cuts. The rhetoric on both sides, in contrast the former federal minority Parliament, has been highly cooperative.
I was afraid that the PCs would see it as their mission to bring down the government, but instead they appear to be acting responsibly and are willing to work with the government to push for better policies.
All that being said, the Taxpayers Federation is right to say that both parties are being far too timid.
But for the first time I see a glimmer of hope that this new Parliament can actually do something, anything, to tackle the numerous problems now facing Ontario.
Tim Hudak is pushing for the government to make some cuts and the Liberal government appears to be agreeing to work with the PC Party to bring forward such cuts. The rhetoric on both sides, in contrast the former federal minority Parliament, has been highly cooperative.
I was afraid that the PCs would see it as their mission to bring down the government, but instead they appear to be acting responsibly and are willing to work with the government to push for better policies.
All that being said, the Taxpayers Federation is right to say that both parties are being far too timid.
But for the first time I see a glimmer of hope that this new Parliament can actually do something, anything, to tackle the numerous problems now facing Ontario.
Tuesday, November 8, 2011
Flaherty confirms that the budget will not be balanced in 2014
Finance Minister Jim Flaherty has announced that the deficit will not be eliminated as quickly as the government had promised. The plan to get out of deficit was based on an assumption that the economy will continue to improve at a certain rate. As has become increasingly clear the economy is not going to improve sufficiently. Who could have possibly have predicted that this would happen?
Oh wait…
I did!
And I wasn’t the only one.
Hell, anyone paying half attention to what was happening in Europe and the United States even back in April could have easily predicted that the Ministry of Finance’s optimist was misplaced. The only thing I can conclude is that no on at the Ministry reads financial news.
History has shown, time and time again, that deficit slaying does not take place on the back of economic growth alone. Real cuts and hard decisions have to be made. If the Government of Canada truly wants to put its finances in order, it has to be far more proactive.
Oh wait…
I did!
And I wasn’t the only one.
Hell, anyone paying half attention to what was happening in Europe and the United States even back in April could have easily predicted that the Ministry of Finance’s optimist was misplaced. The only thing I can conclude is that no on at the Ministry reads financial news.
History has shown, time and time again, that deficit slaying does not take place on the back of economic growth alone. Real cuts and hard decisions have to be made. If the Government of Canada truly wants to put its finances in order, it has to be far more proactive.
In America the rich is not a closed caste
Pundits and Occupiers talk about the rich or the “super rich” as if they were a closed caste. They seem to think that the wealthy in America are the product of generation after generation of rich families. It is true that some of the wealthy members of American society can trace their wealthy ancestors to the 19th century, but this is actually really rare.
In a recent op-Ed Michael Tanner of the Cato Institute pointed out that 80% of America’s millionaires come from families that are not rich.
So the vast majority of the wealthiest came about their wealth by moving up the income scale. I would also point out that it is not uncommon for the children of millionaires to lose all their parent’s money after inheriting.
What we have here is a society where people are rising and falling to the top of the economic/social scale as fortune and skill dictates. This is incredibly rare in the history of humanity and it should be celebrated more.
In a recent op-Ed Michael Tanner of the Cato Institute pointed out that 80% of America’s millionaires come from families that are not rich.
So the vast majority of the wealthiest came about their wealth by moving up the income scale. I would also point out that it is not uncommon for the children of millionaires to lose all their parent’s money after inheriting.
What we have here is a society where people are rising and falling to the top of the economic/social scale as fortune and skill dictates. This is incredibly rare in the history of humanity and it should be celebrated more.
Just wait until we get a majority! (Part 6)
I am sick of this minority parliament. I'm sure it is the opposition coalition of the Liberals, socialists and separatists are forcing Harper to make decisions like this: Finance Minister Jim Flaherty will confirm that deficits will run longer than promised. We need a stable majority government so that we can start standing up for fiscal sanity.
Monday, November 7, 2011
Occupy Toronto, a local smelly nuisance
I hadn’t checked out the Occupy Toronto crowd since the first day that it started. So last Saturday I figured I’d stop by for a peek. What I saw there was pretty underwhelming if you consider this movement is being touted as the source of revolutionary change. In fact the only thing that they appear to be achieving is earning sympathy for the people who live around St. James Park.
The first thing I noticed about the tent city is the smell. It absolutely stinks. I feel sorry for anyone who has to walk past it on their way to work.
The second thing I noticed is that the place was incredibly dirty.
The third thing I noticed was that the few people who were there were also incredibly dirty.
A friend of mine told me that his colleagues at work had, charitably, gotten together the week before the Occupation began and cleaned the park. Their good works had been completely thrown out the window because I have never seen St. James Park look so disgusting.
The most attractive feature of what is otherwise a rather plain looking neighbourhood has been turned into what smells like a garbage dump and looks like the worst kept camping site in Canada.
Keep in mind that the park is next door to a church, a very popular church to hold weddings. I shutter to think of the poor couple that thinks they had paid for a beautiful wedding at one of Toronto’s nicest churches, but instead are getting married at an open air homeless shelter.
All of this is pretty benign (unless you are the poor sucker that has to clean the place up) but their only achievement is being a nuisance. After a month of not showering the movement continues to be pretty vague and dominated by those that are shouting ideas that have been discredited for decades. There is no plan on how to achieve any ends beyond, “starting a conversation.”
So even if you are sympathetic to the goals of the movement, you have to wonder if all this is nothing but sound and fury, and stink. Mostly stink.
The first thing I noticed about the tent city is the smell. It absolutely stinks. I feel sorry for anyone who has to walk past it on their way to work.
The second thing I noticed is that the place was incredibly dirty.
The third thing I noticed was that the few people who were there were also incredibly dirty.
A friend of mine told me that his colleagues at work had, charitably, gotten together the week before the Occupation began and cleaned the park. Their good works had been completely thrown out the window because I have never seen St. James Park look so disgusting.
The most attractive feature of what is otherwise a rather plain looking neighbourhood has been turned into what smells like a garbage dump and looks like the worst kept camping site in Canada.
Keep in mind that the park is next door to a church, a very popular church to hold weddings. I shutter to think of the poor couple that thinks they had paid for a beautiful wedding at one of Toronto’s nicest churches, but instead are getting married at an open air homeless shelter.
All of this is pretty benign (unless you are the poor sucker that has to clean the place up) but their only achievement is being a nuisance. After a month of not showering the movement continues to be pretty vague and dominated by those that are shouting ideas that have been discredited for decades. There is no plan on how to achieve any ends beyond, “starting a conversation.”
So even if you are sympathetic to the goals of the movement, you have to wonder if all this is nothing but sound and fury, and stink. Mostly stink.
Friday, November 4, 2011
Unsustainable health care spending and the government system
The Canadian Institution for Health Information has released a study claiming that the steady increase in health spending is not due to the aging population demographics. Considering that government health care expenditure has been on average rising faster than GDP since 1975, I think that the CIHI is correct. After all the demographic time bomb hasn’t gone off yet, most boomers are still not in retirement. So why would expenditure be so high already?
The study’s explanation is that the increase spending is a political choice. Significant segments of the electorate demands improved services and political parties respond by promising increased spending. Again, without having examined the study closely, this makes intuitive sense to me. It is difficult to find any major provincial party that does not routinely promise spending increases that outpace GDP growth.
This serves as a good example of how demand operates in a government system compared to a market system.
In a market system if individuals want better service they pay for it out of their own pockets. Since the individual pays the cost they would balanced the increased spending with their other desires and needs. Providers of the services know this and they realize that they are competing for dollars. To succeed the providers would not price themselves so high that they chase away the customers. Thus in a market system there is a built in restraint on unsustainable growth in health care spending.
In a government system individuals that want better service won’t be paying directly for it. Instead they will vote for politicians that will use tax dollars to pay for it. The cost would be spread out among not just those that want better service but to those who are either already satisfied or indifferent as well. Politicians would attempt to outbid each other in spending increases to secure the pro-health care increase segment of the electorate. Governments do have to balance priorities, just as an individual does, but the main incentive of political leaders is to win elections and often priority balancing takes a backseat to that. Thus money appears to be unlimited and there is no natural restraint on unsustainable growth in health care spending.
Of course money isn’t unlimited and eventually governments do become bankrupt, but usually the politicians who have caused the problem are safely retired by the time it becomes an issue. There is a clear agency problem in entrusting health care spending to politicians who are making decisions that are based on their own needs not the general public’s wellbeing. The only true solution to the unsustainable spending in health care is take it out of the hands of politicians and put it into the hands of consumers.
The study’s explanation is that the increase spending is a political choice. Significant segments of the electorate demands improved services and political parties respond by promising increased spending. Again, without having examined the study closely, this makes intuitive sense to me. It is difficult to find any major provincial party that does not routinely promise spending increases that outpace GDP growth.
This serves as a good example of how demand operates in a government system compared to a market system.
In a market system if individuals want better service they pay for it out of their own pockets. Since the individual pays the cost they would balanced the increased spending with their other desires and needs. Providers of the services know this and they realize that they are competing for dollars. To succeed the providers would not price themselves so high that they chase away the customers. Thus in a market system there is a built in restraint on unsustainable growth in health care spending.
In a government system individuals that want better service won’t be paying directly for it. Instead they will vote for politicians that will use tax dollars to pay for it. The cost would be spread out among not just those that want better service but to those who are either already satisfied or indifferent as well. Politicians would attempt to outbid each other in spending increases to secure the pro-health care increase segment of the electorate. Governments do have to balance priorities, just as an individual does, but the main incentive of political leaders is to win elections and often priority balancing takes a backseat to that. Thus money appears to be unlimited and there is no natural restraint on unsustainable growth in health care spending.
Of course money isn’t unlimited and eventually governments do become bankrupt, but usually the politicians who have caused the problem are safely retired by the time it becomes an issue. There is a clear agency problem in entrusting health care spending to politicians who are making decisions that are based on their own needs not the general public’s wellbeing. The only true solution to the unsustainable spending in health care is take it out of the hands of politicians and put it into the hands of consumers.
Wednesday, November 2, 2011
Liberty and equality
A couple of days ago I posted a video that explained why liberty is more important than equality. Yet there are some equalities that are important and not hostile to liberty.
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