New Ron Paul advert: The compassion of Ron Paul

Nick Gillespie Discusses Ron Paul, Libertarianism & Iowa on C-SPAN

Stephen Harper is not changing Canadian values

Pundits hostile to the Conservative Party has given Stephen Harper one of the greatest compliments I have ever seen a politician receive: they have accused him of changing Canada to suite his own vision. Stephen Harper, according to way too many columnists, has some sort of demigod power to mold the population to his will. From the top he rules and we the people bend and rush to change our core values. Canada and the society that exists here is nothing but the play thing of the mastermind known by us mortals as Stephen Harper.

Initially I was puzzled by how so many people who are essentially paid to think and write could possibly conceive that such a thing would be possible. Then I realized that they aren’t paid to think; they are just paid to write. In December not a lot happens in politics but columnists must produce and so they scrape together a silly bit of fear mongering to please their narrow minded constituents.

The truth is that Mr. Harper is not changing Canada, at least not in the fundamental way that some are claiming. He is, however, giving a voice to some within Canadian society who have been largely ignored. It is arrogance for these pundits to believe that because it is not their voice it is not Canada’s voice. It is absurdity to think that Canada is a homogenous society with only one set of values or opinions. Many Canadians agree with Stephen Harper, and most of those agreed with his positions long before he was Prime Minister.

The real genius and true revolutionary action of Mr. Harper and the Conservatives is the voter coalition that they have pieced together. It is a voter coalition the likes of which has not been seen before. It includes much of the same elements as the Liberal voter coalition that propelled the Liberal Party into power for most of the last century, but it also includes some new elements. These new elements are every bit as much Canadian as those that have been voting Liberal for decades. Canada is not changing, but the balance of power has shifted slightly.

Consider the evidence that these pundits have offered as evidence of fundamental change: scrapping the long gun registry, ending the Canada Wheat Board monopsony, and the justice reforms. All of these positions, whether they are bad or good, are positions that many Canadians have supported for decades. There was a movement to get rid of the long gun registry almost the second after it was created and the Canada Wheat Board has been an irritant to many Canadians for decades. Where exactly is the fundamental change that was supposed to have taken place over the last 6 years?

Of course Canada is changing. What in the universe isn’t in a state of constant change? But that change does not flow from the Prime Minister’s Office; that is giving government too much credit.

Kelly Clarkson endorses Ron Paul for President

Which kind of makes me wish I knew who Kelly Clarkson is. Something about being an idol American?

Gary Johnson is chased out of the Republican Party

Gary Johnson has announced that he is dropping out of the Republican presidential race and joining the Libertarian Party race. I find this disappointing, not because of anything that Mr. Johnson has done, but rather because of how the Republican Party has treated him.

Much ink has been spent describing how some members of the media have completely ignored Ron Paul despite the fact that his polling numbers indicate that he is a credible candidate. At the same time little has been said about the complete shutting out of Gary Johnson, who was not even allowed in most of the debates.

On paper Gary Johnson should have been a very credible candidate for the GOP nomination. He is a two-term Governor of a state dominated by the Democrats, he has a clear record of fiscal conservatism, and he has a personal narrative that Americans are likely to find appealing. You have to wonder why he was not just ignored but actively shunned.

Keep the Canadian Forces home

A survey by Ipsos-Reid that was presented to senior staff in the Department of National Defense shows that Canadians prefer that the Canadian Forces focus on missions within Canada. This makes a lot of sense. After all it is the Canadian taxpayers that pay for the military, shouldn’t they be the primary beneficiaries of the military’s efforts?

Many would say that Canada does benefit from their being a freer Libya and Afghanistan. Missions that are meant to protect that freedom or aid locals in achieving it are therefore a benefit to Canada. I have some sympathy for this argument because it makes sense in both an abstract and more concrete way. Freedom can only really exist if everyone around you is also free because if others are not free then you are not free to interact with them as you will. The more free people that there are in the world then the more free people there will be for Canadians to freely interact with.

Plus it is rare that countries with a free citizenry go to war against other countries with free citizens. I don’t think it is impossible for free peoples to war against each other, but the circumstances would have to be extraordinary. It is unlikely, for example, that the USA would ever invade Canada for control over the oil sands. It would be much cheaper an easier for the citizens of America to simply buy the oil. A core feature of freedom is that it encourages peaceful co-existence. So in that context sending our soldiers to fight for other people’s freedoms does make a certain amount of sense.

The problem with this argument is that it is not entirely clear that are military can actually successfully instill freedom on other countries. The results from Iraq and Afghanistan are not very encouraging. Despite a decade of fighting and building, violence and oppression is still the norm. There have been some hopeful moments, such as the opening of schools for educating Afghan girls, but the teachers at those schools face a daily threat to life that is almost unheard of in Canada. Considering the level of violence still present, it would be perverse to call either Afghanistan or Iraq free countries.

It strikes me as doubtful that Libya will be any better of a success story than Afghanistan or Iraq. The jury is still out on the idea of liberalization through military intervention, but most of the evidence thus far is that it isn’t working. So the taxpayers in Canada are paying this bill and we don’t seem to be getting anything for it. We have been patient but unless dividends start appearing, foreign adventurism deserves its lukewarm support.

The Canadian Forces exists to serve the interests of the people of Canada. We will always need a military and it is advisable to ensure that military is as strong and well equipped as can be afforded. This does not mean, however, that foreign military interventionism is a necessary part of having a strong military. We should keep the military strong and keep it home.

Harper is right: health care solutions must come from provinces but first he has to show leadership

In his end of year interview Stephen Harper said something on health care policy that is both useful and true. He said that it is up to the provinces to find the solutions to the problems in the health care system. This is not an abdication of federal leadership but a recognition that there are some things that the provinces are better at doing. Provincial governments are the ones that run the health care system and there is a limit to how much a federal bureaucrat can understand the details of each provincial system. Also provinces need to find solutions that work for their own particular circumstance and come up with political compromises that are acceptable to their own populace. Federalizing the issue of health care does nothing but hopelessly complicate an already complex policy dilemma.

So I am very happy to hear the Prime Minister admit the limitations of the federal government and encourage provinces to take action. At the same time he has to recognize that the federal government is preventing provinces from exploring any meaningful reform. The Canada Health Act severely limits the range of policy options that would be possible even while maintaining the goal of universal access.

Too many Canadians are stuck in a simplistic comparison between Canada’s and America’s health care system. Instead we should be looking at the policies in Europe and seeing how universal or near universal access can be achieved without the single/public-payer system. Models from the Netherlands or Switzerland, neither could be called havens of extreme capitalist thought, would be violations of the Canada Health Act.

The way that the federal government enforces the Canada Health Act is through the funding that they provide to the provinces. With health care spending eating up half or nearly half of provincial revenue, the provinces are reliant on the money that the federal government sends them. If any provincial government does anything that the federal government interprets as a violation of the Canada Health Act and that funding will dry up. The upshot is that if Ontario wants to take inspiration for solutions that have worked well in the Netherlands, they would face financial ruin at the hands of the federal government.

Despite Mr. Harper’s reputation for being open to reform in the health care system, his government has consistently reconfirmed its commitment to enforcing the Canada Health Act.
Mr. Harper is right that the solutions must come from the provinces but he has to allow them the tools to fine those solutions. Although it may be politically difficult, for reform to be possible the Canada Health Act cannot remain unchanged.

The most positive change that the federal government can make is to remove the requirement of a single/public payer as a condition for federal financing. Note that this is not the same thing as removing universal access as a principle of the act. As the Europeans show us, single/public-payer is not the same thing as universal access.

It is in reforming the Canada Health Act that Stephen Harper not only can but must show leadership.

A Christmas birthday

Supreme Court says no to a national securities regulator, so now what?

Earlier this morning the Supreme Court of Canada gave a firm no to a national securities regulator. I have written in the past why a national securities regulator would do more harm than good, and so I am very happy with this decision. I am also extremely happy with the arguments that the Supreme Court uses. The decision clarifies and reinforces what is provincial and what is federal jurisdiction then makes clear that the federal government does not have the authority to legislate provincial affairs. The reaffirmation of Canada’s jurisdictional federalism from the highest constitutional court is very much welcomed.

The core reason why I strongly support security regulation as a provincial matter is the need for regulatory competition. One of the main advantages of a federalism like Canada’s, where authority is separated (as opposed to Germany where authority is shared), is that it allows for the different provinces to learn from each other. Policy making is a very unscientific process because it is usually impossible to conduct experiments, but by observing what other provinces do policy makers can learn what is likely to work and what isn’t. It introduces something that is at least close to a market for governments.

Now that the Supreme Court has come to its decision we should focus on how to strengthen the competition between securities regulators in Canada. A friend of mine recently pointed out to me that the largest hamper to competition is the requirement that you must register with each securities regulator if you want to deal with investors in each province. This means that there isn’t so much competition as a series of monopolies. There is still potential for policy learning, but the incentive to make positive reforms is weaker.

Luckily many of Canada’s securities commissions have already found the solution in the form of a passport system. This allows businesses to register with one regulator and be allowed to deal with investors in the other provinces that have a passport agreement with that regulator. Effectively what this means is that businesses are able to select the regulator that offers the best balance between appliance cost and investor protection (businesses have an incentive to pick a regulator that would ensure investor confidence). This in turn encourages regulators to ensure that they reduce appliance costs while maintaining strong investor protection.

This passport system should be extended to include all provinces, and Ontario especially should join. This would not only encourage competition but would also reduce costs on businesses who would then only have to deal with one regulator instead of ten.

The results of beer regulation in Ontario

This is an article I wrote for the Fraser Institute's Canadian Student Review. It is meant as a backgrounder into beer retail regulation in Ontario and the results of that regulation. For one thing, did you know that The Beer Store is a private company?

Makers vs. Takers at Occupy Wall Street

I think that he is being overly generous in his assessment of the motives of the people who participated in the Occupy movement, but his point is well taken (by me at least).

Short selling is about hedging against risk

Kyle Bass talks about his investment ideas but the interviewer is more interested in attacking short sellers. Mr. Bass gives an intelligent defence, short sellers don't cause crisis they merely hedge against the possibility of crisis.

"Don't hate the mirror because you are ugly."

3 claims that convinces me that Paul Krugman is a hack

The economic crisis of the last few years has not been good to Keynesian economists. The universal response in the autumn of 2008 and the winter of 2009 was to enact policies that were being trumpeted by the intellectual descendants of Lord Keynes. The results have not been encouraging and the skeptics have largely been proven right (at least proven that they were right to be skeptical). Some economists who are friendly towards Lord Keynes’ theories claim that things would have been worst if countries had not stimulated. This is a conclusion that does not arise from any empirical data. They operate under the assumption that their theory is right and that their models are true reflections of reality. If you based your conclusions on these models then yes you can see that things would have been worst. This is, however, the same as saying, “If we assume that I am right then therefore I am right.” I don’t find this argument very convincing.

Paul Krugman, in an effort to save his increasingly shallow intellectual theorizing, has come up with three predictions that Keynesians made that has come out true. I won’t be as crass as to point out that this is the exact same method that a psychic uses: make lots of predictions and then cling to the few that happened to come out as true as if it was evidence of your power. No, I would never be that crass.

Instead I will look at each one of these so called predictions and point out why none of them offer convincing evidence that modern Keynesian theory is sound.

1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you’d expect in a liquidity trap.

Interest rates are low because central banks, especially the Federal Reserve, have been doing everything in its power to keep interest rates low. If the central banks were not distorting the credit market, then we don’t really know what would happen. The economy is an entire system you can’t simply look at two variables and claim causality. There is usually some other variable in the mix that is having an effect. This is what makes economics such a complex field of study. It is highly intellectually dishonest to claim that your causality hypothesis is correct when you know for a fact that there is another variable that has a more established claim on effecting the outcome.

2. Inflation has been quiescent despite huge increases in the monetary base, again what you’d expect in a liquidity trap.

This is another example of what I pointed out above. Mr. Krugman is simply looking at two variables while ignoring the other possible (and more likely) explanations. It is an established tendency, although not an iron clad rule, that high unemployment is associated with low inflation. Unemployment in the United States has been very high and thus it is consistent with the pattern to observe low inflation. I admit that it is impressive that inflation is so low despite the “huge increases in the monetary base.” My point here isn’t to say that my explanation is right and Mr. Krugman is wrong (although I think he is). I am simply pointing out that his explanation is incomplete to the point of being dishonest. If this is the best that Keynesianism can offer I remain unconvinced.

3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place.

I find this to be the most puzzling of the three claims. I almost suspect that Mr. Krugman had to desperately think of a third prediction as to make his argument sound more rhetorically pleasing. What austerity measures in what countries? Any results from Europe can be discounted. There is too much going on in the European economy to isolate austerity measures as the cause of any economic problems. Besides most of the austerity plans haven’t been enacted yet. Austerity hasn’t taken place in Canada and the United States, not in any really significant way anyway. So where exactly is Mr. Krugman drawing his evidence from?

Is this really the best that a Keynesian has to defend her theory? I suspect not. I suspect instead that this is the best that Mr. Krugman has to offer. The list of claims that he makes above are shallow and dishonest. This once great Nobel Prize winning economist has descended from respectability to become a hack columnist writer. He produces dribble that pleases his constituent readership and little more.

Grandma Got Indefinitely Detained (A Very TSA Christmas)

Federal government's new health care transfer plan not the stuff of a decentralized federal state

Several pundits have been claiming that the federal government’s take-it-or-leave-it and no-strings-attached health transfer proposal is evidence of Mr. Harper’s desire for a more decentralized federalism. The federal government has promised to increase health care transfers by 6% until 2016-17 and then increase transfers according to growth in nominal GDP (not government revenue) but never to increase transfers by less than 3%. Unlike Paul Marten, Stephen Harper is not demanding national standards or any other provincial concessions. As long as the money is spent in the health care area, provinces can spend it as they like. To give this a little more colour you can remind people of Mr. Harper’s Alberta firewall letter, which was basically a manifesto for a more decentralized federal state. The lines practically draw themselves and it is easy to see how they reached such a conclusion. These pundits, however, are forgetting two crucial facts that make it pretty clear that Mr. Harper isn’t actually doing much to end the encroachment of the federal government into provincial affairs.

The first fact is that Paul Martin’s Health Accord was unusual and did not represent the normal way that health care transfers were negotiated.

Traditionally it has been much closer to what Harper’s government has done: here it is, take it or leave it. Also it has been unusual for federal governments to establish national standards and put in the kind of conditions that Martin’s government included. Those ideas came out of the Romanow Commission on healthcare that was released shortly before the Health Care Accord was negotiated. The reality is that Paul Martin is the blip and Stephen Harper is just bringing things back to business as usual. This hardly demonstrates a radical decentralization agenda.

The second fact that is missed by pundits is that the Harper government has committed itself to encroaching on provincial affairs in a huge way.

The Canada Health Act is the very embodiment of federal interference in provincial policy making. The Canada Health Act tells provinces what it can and can’t do in health care policy and threatens to end transfer payments if they do not comply. Any agenda to remove federal interference from the provincial policy sphere would have to include a dismantling of the Canada Health Act. It is quite simply the largest such interference in Canada. Stephen Harper and the government and party that he leads have time and time again said that they are defenders of the Canada Health Act. Again this is hardly the stuff of a radical decentralization agenda.

It could be argued that Stephen Harper or some members of the Conservative Party would like to reform or remove the Canada Health Act but that they are too afraid of a public backlash to do or say so. This may be true, or it may not, it doesn’t really matter. The reality is that government policy, for one reason or another, is to keep and enforce the Canada Health Act. Changing this policy isn’t even something that Conservatives wistfully talk about the way they did with the Canada Wheat Board for years.

The absolute most that you can say about Stephen Harper in regards to federalism is that he is clawing back the centralization of Paul Martin and returning Canada to the balance that existed under Chretien and Mulroney. It may be true that he has some sympathy for a more decentralized federalism, but he hasn’t done too much towards that goal nor does he appear to be making any plans to put such a thing on the agenda. Claims to the contrary are simply either exaggerated or wrong.

Virtue requires liberty

To be virtuous you have to have the choice not to be. If you are forced to always do a good thing then you can never choose to be good. True virtue requires liberty.

Ron Paul takes the lead in Iowa

The most recent anti-Romney anointed one, Newt Gringrich, is seeing his campaign collapse like so many before him. It is seems that this time it is Ron Paul that is picking up at least some of the pieces:

Newt Gingrich's campaign is rapidly imploding, and Ron Paul has now taken the lead in Iowa. He's at 23% to 20% for Mitt Romney, 14% for Gingrich, 10% each for Rick Santorum, Michele Bachmann, and Rick Perry, 4% for Jon Huntsman, and 2% for Gary Johnson.

In honour of the passing of the monster Kim Jong Il

Giants of the Scottish Enlightenment Part Two: Adam Smith

10 good Conservative government policies

I think I may have a reputation for being a bit of an anti-harperite. I don’t think that this is really true. I don’t feel any more personal animosity towards the Conservative Party than I do any other political party. Perhaps a couple of years back I was a bit bitter at how libertarians were treated within the party, but I’m over it. Still I constantly criticize the Harper government, not because I have an agenda to bring them down (that would be rather megalomaniac of me) but because I call a spade a spade; bad policy is bad policy regardless of what party is proposing it.

The Conservatives propose a lot of bad policies. Some of their legislation is so awful that it makes me want to rip my hair out (which explains why I am starting to go bald). At the same time not all of their policies are bad. In fact since the May election they have had some pretty good ideas. So in the spirit of the coming Christmas, I write this post to point out some of those good things that the Conservative government is trying to do (in no particular order).

Getting rid of the gun registry

This has never been a big issue for me, but I agree that the registry was wasteful and invasive. I am glad that the government is getting rid of it.

Ending the Wheat Board

The Canadian Wheat Board, like all supply management, is ultimately destructive to both consumers and producers. This anachronism of a time of enthusiasm for economic nationalism should have been done away with two decades ago, but better late than never. Next up will be the poultry and eggs supply management (or not).

Pooled Retirement Pension Plan

Over the last couple of years there has been a big push to expand the CPP. This would have been a horrible idea and so instead the government has introduced the PRPPs. There are some nuanced changes that should be made to the legislation, but the concept is pretty sound.

Native Property Rights

This is something that has been muttered about for a while now, but the government looks like it is finally poised to do something about it. Property rights have been shown time and time again as a requirement for prosperity. It is time for those living on the reserves to be able to enjoy the full benefits of capitalism.

Entering talks to join the Trans-Pacific Free Trade Zone

No “free trade” deal has ever been truly free trade, but such deals do allow a greater degree of free trade and so I approve. The Conservative government has done an excellent job of negotiating bi-lateral agreements and this is simply the next logical step.

Restoring the right to defend yourself

There have been some recent high profile cases of individuals getting into legal trouble for simply defending themselves. The Conservative government is acting very appropriately in taking steps to ensure that other people don’t run into the same problem. After all, even Thomas Hobbes, who is pretty much unconcerned with individual liberty, says that the one right no one can ever surrender to the state is the right to self-defense.

Getting out of Kyoto

Considering the fact the federal government starting ignoring the Kyoto Accord about 5 seconds after signing it, this was a formality but an important one. Kyoto has been a failure regardless of your opinion on climate change and the Canadian government is showing leadership by being the first signatory to publically admit it.

Capping health transfers

Health care spending is out of control and reform is a necessity. Capping the growth of health care transfers from the federal government to the provinces is not even close to being a solution, but at least it introduces some fiscal discipline to the mess.

Restoring rep by pop (or at least coming closer to it)

The way Parliamentary seats are distributed currently is fundamentally unfair and violates the principle of representation by population. The Conservative’s plan doesn’t fix the issue completely but at least it comes as close as possible. I for one can’t think of a way to approve the new system other than not giving Quebec those random extra seats.

Ending the vote party subsidy

It doesn’t matter if you think that this is a cynical plot on the part of Stephen Harper to continue the destruction of the Liberal Party, it is good policy. Taxpayers should not be forced to provide funding to political parties. There are of course more subsidies that continue to exist, but at least this one source has been removed.

There, I came up with ten conservative government policies that are good. There may be a few more that I either didn’t hear about or have forgotten, but ten is enough I think. I am glad that these policies have been either enacted or are being actively sought by the government. With any luck next year I will be able to think of more than just ten.

Legalize moonshine

State insolvancy and public service pension

The C.D. Howe Institute has released a study that says that federal pension plans are hiding an 80 billion dollar liability. The government denies this liability saying that their accounting practices are approved by…the government. The C.D. Howe Institute points out that these practices would not be accepted by the private sector. The response to this is that it is not comparable because the government can’t become insolvent or cease to exist.

Are you kidding me?

Is there no history of states going out of business or going bankrupt? I can think of a few that have gone completely out of business over the past couple of decades and you don’t even have to think very hard to think of a countries that go insolvent on a regular basis (One of them starts with an ‘A’ and ends with an ‘rgentina’).

The reason why we should worry about this issue is exactly because Canada can go bankrupt and that unless the finances are fixed this is certainly a long term possibility.

Ending the Global Drug War: Voices from the front lines

Paul Dewar and the problem of forcing people to give

NDP leadership candidate Paul Dewar gave a pretty comprehensive interview The Tyee. In it Mr. Dewar talked about a wide range of positively awful and slightly scary policy ideas. Instead of taking apart each of these bad suggestions, it seems more worthwhile to target what appears to be the underlining philosophy. In a fundamental way Mr. Dewar misunderstands what it is to take care of a person and that misunderstanding leads to a deeply divided society.

This is what he said:

We are going to have a country, and I'd like to be a prime minister, who says we are going to take better care of each other and not apologize for that.

I appreciate the sentiment, at least what he literally says and not what he actually means. There are a lot of people in my life that I value and take care of to the best of my ability and to the extent that they need taking care of by me. Many of these people make a similar effort to take care of me. There is a bond between us of mutual respect and love. There is a familial and friendly duty that ties us together and makes us all better off. Truly I say without such connections in my life I could not be the happy person that I am.

This is not what Mr. Dewar means when he says “take better care of each other.”

Mr. Dewar is talking about a process by which the state takes some resource from one individual and provides it to another. This sort of exchange is very different than the one that I described above. First and most importantly is that it is not voluntary. Also it is not a mutually beneficial exchange. When I give to my nephew, even though my nephew is too young to give much back to me besides affection, it is to my benefit and gain. If something is taken to me and given to a stranger I gain nothing. You can’t even argue that I gain by having access to the same benefits of forced assistance. If I contributed nothing to the state I would have the same access, in fact I would likely have more.

Some of you may think me selfish for thinking only of my gain, but why shouldn’t I think of myself? Why should I not object when my liberty and property is stripped away to benefit someone else? How do I know that the person who is receiving my forced assistance even requires my help? Also how do I know that they aren’t using my resources to do something that I disapprove of? What right do these strangers have to my stuff?

I suspect that it is at least part of Mr. Dewar’s thinking that this forced taking care of each other would pull us together. Politicians and others that use his sort of rhetoric seem to believe that government can create the same kind of social bonds that exists between me and my family and friends. By having a government that forces everyone to tend to everyone’s needs, they think that we will have a more united and socially coherent society.

The opposite is actually true because most, if not all of us, will at some point ask the questions that I asked above. Even those that are satisfied to have their money spent on some people in some ways will be able to find something that they object to in how the state assists people (what is Dewar’s opinion on the assistance given to oil companies?). There will also be those who see an opportunity to profit from the system by scheming to obtain a disproportional amount of that assistance. For this purpose people build coalitions of groups that apply political pressure to gain advantage. This breeds resentment (think about the negative feeling people get at the term ‘special interest group) and other groups must organize to either protect themselves
or to try and gain their own special privilege.

Far from a society of happy helpful people that look out for each other, we have a society that is divided and constantly fighting over a piece of the assistance pie. My neighbour becomes my enemy because I suspect that my neighbour is gaining more from the system than I am. My neighbour becomes someone to fear and not someone to build a community with.

Mr. Dewar should re-examine his policies and consider what he is trying to achieve with them. The world is not such a simple place that we can just give a poor man more money and everything will be better. Public policy should exist in this complex world not the imagined simple one of Mr. Dewar’s mind.

Norway butter and the importance of free trade

For a combination of reasons Norway is running out of butter. People are paying four times the normal price as the Christmas baking season approaches.

“Hang on a minute,” you say. “How can an entire country be running out of something? Can’t the citizens of that country just buy it from a foreign provider?”

Well it seems that the Danes would be more than happy to do so except that the tariffs in Norway on butter products is so high that it isn’t profitable for Danish merchants to enter the market in a big way.

This is exactly what we mean when we talk about how destructive anti-trade policies are. Norway, a fully industrial modern society, is experiencing food shortages as if it was a poor African country. Granted that butter is not vital to dietary needs, but it is a commonly used ingredient and so it pretty much guarantees that food prices in general are going to sky rocket.

The best way to avoid this sort of situation is to allow the free flow of goods and services. That way if there is suddenly a greater demand there would be a supply to meet that demand.

Friedman: capitalism isn`t a sufficient condition for freedom

Imans speak out against honour killings

It makes me glad to see this sort of thing. The more people that condemn this sort of primitive behaviour the better. I am glad that Canada has such leaders in its Muslim community.

Canadian imams plan to condemn the "misguided notion" of so-called honor killings in their Friday sermons this week, responding to the high-profile trial of a father accused of murdering his three teenage daughters, allegedly because they shamed his Afghan family.

The two dozen imams, backed by 60 Canadian Muslim groups, will plead for action to fight domestic violence, perhaps quoting comments from the prophet Mohammad that "the best amongst you is he who treats women the best."

"We felt very strongly that we had a responsibility to make it very, very clear that honor killings -- so-called honor killings; we don't want to consider them anything honorable -- have absolutely nothing to do with Islam," said Sikander Hashmi, an imam in the Ontario city of Kingston where the trial is taking place.

Flaherty demands veto power over bank decisions

Finance Minister Jim Flaherty is arguing that he should have more power over what banks do because if the banks screw up it is Ottawa that is “on the hook.” Of course it doesn’t occur to him that Ottawa isn’t actually “on the hook” in the sense that the government HAS to bail out banks. In fact the government is not responsible for dumb decisions made by bank executives unless the government DECIDES to be responsible.

What we need here is a metaphor: Say I have a 30 year old son that is pretty reckless with his finances. He is undoubtedly a full adult and he actually has a really good job that gives him a strong income. Despite this he keeps getting in trouble with harebrained schemes and silly ideas. He is completely broke and he can’t possibly pay even the minimum requirements on his credit card.

I as his parent have two options: I can let him go bankrupt, or I can bail him out. As a loving father, and despite the fact that it puts my own finances under strain, I decide to bail him out.

Now there is somewhat of an assumption that I will be “on the hook” the next time he screws up. I haven’t even so much as tried to say this is a one time deal in any credible way, so this assumption seems to hold. So in order to protect my own savings I start telling him what to do and I start interfering with his life. He lets me because he knows that he relies on me to save him (and if this metaphor were to be more complete he would also allow me because I own a gun and he doesn’t).

If I had treated my son as an adult and allowed him to work out his own mistakes I wouldn’t have a reason or an excuse to interfere so much with his life. The reason for my interference isn’t to prevent him from screwing up, it is to protect myself, but the best way to protect myself would just be to declare that he will never receive a bailout ever again.

There are several problems with my metaphor (what metaphor isn’t problematic?). The biggest problem is that the government doesn’t have a paternal relationship with the banks. There are no familial issues of love and loyalty. A more accurate metaphor would be that I am not bailing out my son but a complete stranger.

Actually come to think of it, that isn’t a metaphor at all. I am in fact bailing out a complete stranger. I am not even doing it by choice I am being forced to bail out this stranger. In exchange another stranger (who is supposedly acting as my agent) is going to start vetoing decisions of the first stranger. I fail to see how this is remotely a good deal for me. It is far worst than bailing out my son because at least that was someone I presumably love.

So no Mr. Flaherty you shouldn’t get more power to veto bank decisions. You should instead stop forcing me to bail them out of the bad decisions. I am not even sure why you think you are such a mastermind that you can do a better job at producing a secure banking system than the market anyway. Or for that matter why you assume your successor will be as brilliant as yourself. It isn’t like government decisions have never lead to horrific disasters at any point in history.

The one big problem with the Canada-USA border agreement

The CBC lists 6 things that we can expect to be in the new border agreement between Canada and the USA that is being announced today. Of those 6 items I support without hesitation 5 of them. The first on the list, however, gives me pause.

1. Better aligned regulations: Canada and the U.S. still have different regulations and standards on a lot of products, on everything from vehicles to food to consumer products. Those rules can slow trade or make it harder to make goods compatible, so much so that Harper and Obama set up a separate agreement on regulatory co-operation. Canada expects this agreement to lower costs to businesses and consumers.

As someone who is concerned with Canadian’s freedom to trade externally and internally you would think that I would be supportive of this. After all, as the above points out, different regulations slows down trade and often acts as a hidden obstruction, yet there is another consideration to take in account. That consideration is the danger of spreading bad regulation and hampering good policy making.

I’m not overly concerned with sovereignty when it comes to this issue. Agreeing to bilaterally align regulation is not a giving up of sovereignty. It is a decision that having similar or identical regulation is more important than whatever the benefits are of the regulation before alignment over the regulation after alignment. That is most certainly the choice of a sovereign state.

My problem with it is that we don’t really know before hand how much worst or better the aligned regulation will be. In an ideal world we would examine the regulations of both the United States and Canada then decide which is better and adopt that regulation. Government does not exist in an ideal world and the path to alignment is likely to be far bumpier. For one thing defining what exactly “better” means will depend greatly on who is negotiating and which interest groups are at the table.

The results may be terrible, it could be alright, hell it is just barely possible that the results will be better regulation all around. When mistakes are made, however, it will be difficult if not impossible to fix the mistake. Two government agencies from different nations would have to work together and coordination across borders is not simple or easy. If you want an example of how well it works just take a look at the European Union.

Also, since the regulation will be the same it would be difficult to figure out exactly why the policy was failing and what the potential solutions are. Usually government learns these things by comparing themselves to similar countries. Without a US-Canada comparison, policy learning as a near scientific approach would be greatly hampered.

Think of it this way: if you want to make good regulation you have the choice of either trying different things until something works (potentially highly destructive), or you can look at what other countries have done right or wrong and learn from them. The fewer examples you have to learn from the less likely it is that you will discover the best possible policy. This is not a trivial matter. It strikes at the very heart of our regulators ability (as limited as it already is) to be good governors.

I find it unlikely that streamlining trade just this little bit will be sufficient to make up for the risk of making regulation worst. I am almost certain that it isn’t worth the disadvantage of making policy learning more difficult.

The LCBO and the neo-prohibitionists

Ontario Finance Minister Dwight Duncan defended the board of the LCBO with words such as “competent” but at the same time he endorsed Auditor General Jim McCarter’s criticism that the LCBO doesn’t do enough to negotiate lower prices. I suspect that Mr. Duncan is thinking about the deficit and realizes that perhaps the LCBO cash cow can be squeezed for a few pennies more. I am skeptical that the LCBO really is as much of a revenue booster as its proponents claim, but that is another post for another time.

The best defense of the LCBO’s lack of business sense is that making a profit isn’t what the Liquor Control Board is all about. The core mission is to control liquor; the real purpose is what they call “social responsibility.” Once the Orwillian element is stripped away really what is being said is that the LCBO exists to keep the dream of prohibition alive.

The LCBO doesn’t want to lower prices because it will mean that people could afford to buy more alcohol. The immediate response to this ought to be: so what?

Why does it matter that people drink more? What harm does it do?

Don’t tell me that alcoholism is a curse on families. Higher prices do nothing to prevent alcoholics from over consuming. If you are a drunk you will sell your children for a cup of beer. If you are an irresponsible drinker than you will behave irresponsibly and buy more alcohol than you can really afford. The only people that will actually drink less are the sort that would like a cocktail or a beer to relax with after work but can’t afford the inflated prices. It is the responsible drinkers that suffer in the mission to prevent the irresponsible drinkers from behaving irresponsibly.

I sometimes suspect that it isn’t really the alcoholics that concern the neo-prohibitionist supporters of the LCBO. Truthfully it is more like they see something inherently immoral or scummy about drinking. It is as if in their mind every man was a drink away from becoming a monster and every woman was a shot of tequila away from being a whore. It isn’t about helping people who abuse drink, it is about making a value judgment about what people do in their spare time.

This is the value judgment that the LCBO is making when it promotes “social responsibility” by discouraging its customers from buying its products. The LCBO at its core, deep down in its institutional setup, practically written right into its mandate, thinks that you are a scumbag for wanting to drink.

It is not the business of any government agency in a free society to make that kind of judgment. It is past time to brush off the last remnant of prohibition and allow private entities to retail alcohol in Ontario.

The LCBO screws consumers with baffling business practice

One of the arguments often made in favour of the Liquor Control Board of Ontario’s monopoly is that, by being the world’s largest single purchaser, it can negotiate discounts with suppliers. This argument deserves a great deal of skepticism. After all it isn’t like alcohol is particularly cheap at the LCBO. It turns out that the skeptics are right.

According to the Auditor General of Ontario the LCBO doesn’t even bother to negotiate a discount. There are therefore no cost savings in having the Control Board as the sole purchaser from suppliers.

This is just one example of the supreme incompetence of the government owned LCBO. It is time for the government to allow competition and to stop screwing law abiding adult consumers of alcohol.

Because it is December again

I would be proud if this was my son

Although if he were my son he would be a liar.

The core of the European crisis is a lack of economic freedom

As the Greek crisis rapidly turn into the European crisis there is a scramble by world leaders to “fix it.” Of course it isn’t that easy because the real crisis in Europe is a systemic one; the real downfall of Europe is a lack of economic freedom and it isn’t going to be easy for European leaders to change that overnight.

I backed up the claim that a lack of freedom is the primary issue in a recent op-Ed I wrote with Fred McMahon. We examine where the Euro-countries place on the Fraser Institute’s Economic Freedom of the World Index:

A glance at the Eurozone countries shows us that nine out of 16 of the member countries fall under the “mostly free” category, five of the 16 are “relatively free,” and two of the countries are “relatively unfree.” The freest country in the Eurozone is Finland, ranked 11th in the world in the economic freedom index. In contrast the least free country, Greece, ranks 88th in the world. The massive difference in economic freedom enjoyed in different countries in the Eurozone creates a dividing line and it is pretty easy to see conflict arising across that line.

The list of countries that fall into the less free side of the line reads like a list of the economic problem children of Europe. Spain, Italy, and Portugal all fall into the “relatively free” category. Greece, the main problem child, is ranked “relatively unfree” on the index. The only country that has required assistance that is “mostly free” is Ireland, and Ireland has shown the strongest signs of economic recovery.

The “mostly free” United States has also experienced economic turmoil but the downturn there pales in comparison to Greece or Spain. No one but the most exaggerating of alarmists would claim that the American economy is in danger of imminent collapse, while the complete unraveling of the Greek economy is quite real. More so than in America, it is the less economic free countries of Europe that are bearing the brunt of the ongoing global economic crisis.

Some European countries (as we write above) are pretty high on the economic freedom index.
Proponents of economic freedom would expect these countries to be more able to handle the shock of the crisis, and so they are. At the same time, however, the freer Euro-countries are being dragged down with the not so free.

It isn’t because investors don’t trust Germany that the German bond auction went so badly. It is because investors now know that Germany is tied to the hip to countries that they do not trust. The bad economic policies of Italy and Greece are damaging the German economy and finances in a big way. At the same time the only thing that is keeping Greece from completely sinking is that they are tied to the hip of Finland and Germany

Ultimately, for the long run, there can only be one solution to this problem:

Austerity measures are not enough. Greece and the other troubled countries need to take a fundamental look at the very structure of their economies and find a way to increase economic freedom if they want to ensure a prosperous future for their citizens.

Randy Hillier pushing to end pit bull ban

Randy Hillier is leading the charge to repeal one of Dalton McGuinty's many bans, the ban on pit bulls. He is being joined by MPPs from both the Liberal Party and the NDP. Considering the multiparty nature of this move and the minority parliament, I am pretty hopeful that it will get through.

The pit bull ban is a classic example of government policy at its worst. It amounted to nothing more than headline chasing and lacked any pretense of being a measured response. For the sake of a positive news cycle the government took a little bit of freedom away from the people.