Tuesday, April 27, 2010

Canadian electoral reform

This week in the Globe & Mail Neil Reynolds writes about Canada's inability to elect majority governments of late, and how that could jeopardize our democracy.
Well, I won't start rhyming off the jokes about democracy and the tyranny of the "majority" and how democracy is three wolves and two sheep voting on what's for dinner.......OK, sorry, I said I won't.
Mr. Reynolds makes the point that very few (25 out of 308) of our Federal Members of Parliament (MPs) actually received a majority in their ridings in the 2008 federal election. That fact can be viewed this way: only 59% of the qualified electorate actually voted and 37% of them actually chose candidates that form our current Conservative minority government. So our current government represents just 22% of the possible voters, but that speaks to the issue that voters feel powerless to change the system so they don't bother to vote. That last point of course, is why we have many little parties, Libertarians among them.
Mr. Reynolds suggests that allowing a "runoff election" in ridings where no candidate has a majority, as is done in many countries, will rectify the situation. He further goes on to blame our multi-party system especially the Bloc Quebecois and the NDP for our inability to elect a majority now, or in the foreseeable future. All this of course is true, just as its true and ironic that many of the smaller special interest parties receive the bulk of their funding from the public purse. It just makes me shake my head, we are paying for the Bloc to block a possible majority and allowing them to disrupt the running of our parliament and split the country apart, only in Canada!
Anyway, the odds of this issue being addressed by the current government is nil. Their primary attempt at electoral reform is to create more ridings in areas where more Conservatives can be elected, that is, in rural areas and out west while improving representation by population (also a good idea). This may be our only hope, but its affects will not be felt for years.
In the meantime some groups are pushing for what is called proportional representation, an idea that was defeated in the last Ontario election in a referendum and would further fracture our already fractured parliament. If it weren't so serious, it would be funny.          

Thursday, April 22, 2010

The Green Myth

Today thousands of children across Ontario and probably much of North America will be picking up garbage. It's Earth Day and Ontario schools will be demonstrating to their little clients what it means to be "stewards of the planet", the official propaganda of the Ministry of Education.  Students will don rubber gloves, go to local parks and be reminded that humans are a blight on the environment. Back in class they will be told that we use the wrong kinds of fuel, and we are melting the Polar Ice Cap causing thousands of innocent Polar Bears to drown. Students will be told that they must prepare to live more modest lives than their parents, reduce, reuse and recycle. Our collective guilt can only be assuaged if we are GREEN!

Thankfully most students will not take this to heart, and this lesson will have the same effect on school children as telling your own kids to clean their room - it won't happen. The temptations of technology, of having fun for its own sake, of living this life while you can, are the things that will drive this group of children. They will pay lip service to the new environmental religion but that's all. Either that or they could be driven to this sort of thing: No Impact Man. Ugh!

Unfortunately our governments do not just pay lip service. Pressure from within, from special interest groups and industry, have caused the Ontario government for example, to misallocate funds on our behalf (they are good at it).  A recent deal with Samsung Corporation will have Ontario consumers paying far more for wind and solar electric power than the market price for electricity. Up goes our electric bill! Who needs the Machiavellian "cap and trade" schemes that were being touted at the Copenhagen Climate Conference last December. The McGuinty government is doing it through the back door. Wind and solar look good, but cost lots and are somewhat intermittent, so conventional power generation must be built as well to ensure adequate power production. Nuclear is also climate friendly, but very expensive and prone to premature breakdown as we have seen from half a century of use. No one makes money on nuclear power, more government subsidy.

The McGuinty government will also give tax breaks (up to $10 000) for electric cars which have no emissions! if you happen to forget how electricity is produced. Oh well, it looks good and that is what is important.

We have been told in the media and by politicians that the new economy will be GREEN, thousands of new jobs will be created. Does this mean that entrepreneurs are rushing to invest in all things green? No, most of the money is coming from government coffers which are pretty empty these days, so the green future will be financed by debt, and those children who are being indoctrinated today will indeed have a more modest future. Happy Earth Day.  

Tuesday, April 20, 2010

Pandering to the electorate

It seems the government of Ontario is gearing up for the next election, already. There is just a year and a half to go and the Liberals of Ontario seem to be coming out swinging as protectors of the little guy - a traditional NDP ploy.
In the fuzzy economics of government, Premier Dalton McGuinty has made some fuzzy statements lately to "help" us all cope with rising costs and rising expectations.
McGuinty will protect renters from greedy landlords, protect the environment from....well... from  us, and protect us from greedy pharmacists, and its still early days. The National Post has a great editorial on the doings of Dalton here, it's a must read.  

Monday, April 19, 2010

This week we will pick on teachers

The Globe and Mail has just completed a nine month investigation in which it has discovered that the largest school boards in Ontario waste money. HELLO! What a shock! They should have asked me, I would have sped up their investigation. Look what the Globe decides to pick on.
The Globe discovered that school boards would rather hire experienced retired teachers than inexperienced new graduate teachers to cover for the contract teachers who have an extended illness or are on mat leave. This is absolutely true, but lets back up a minute to see if its crazy.
Most of you reading this are not, or have never been, a school teacher. Imagine being absent from your job for a day or two, the likelihood is that no one was hired to replace you for that time. Upon your return you catch up on the work back-log or even do some of the work from home. Not teachers; if the teacher is absent he/she requires a substitute, and that sub must be given instructions by the absent teacher. For short periods of time even freshly minted teachers may be able to handle such an assignment, hell a door stop probably could. What about extended absences? Would you trust an inexperienced teacher to deliver the program and manage the classroom for several weeks or longer? Well, neither do most contract teachers or their Principals. Realistic new teachers realize this, and accept being  paid on a graduated grid (when they get a contract) over ten years, because they are most incompetent when they start and become less so over time.
The Globe journalists seem to be hung up on the pay (no wonder), the retired substitute gets the vaunted teacher's pension, AND is paid at regular pay rates for the long term substitute job; not bad (to a point). The journalists are jealous because their jobs have been lately on tenterhooks, so who can blame them.
The issue here is not just double-dipping retired teachers preventing fresh young blood from entering the profession, its much deeper and wider than that. The issue is that public sector unions and governments have been in cahoots for years and now the chickens have come home to roost. Governments are looking for ways to save money and reduce their spending and the past deals based on old assumptions are no longer appropriate. The apparent waste in hiring substitutes needs to be addressed - but the unions/federations will not go quietly.
It's not just teachers, what about retired hydro employees who go on consulting contracts for their former employer? What about unionized LCBO workers who contract deals to sell liquor? Union people must sell liquor?  That's a skill?!
The crunch is coming folks, the public sector unions will be dealing with cash strapped governments at all levels soon and changes will be required. I hope the Globe does more of this digging, the voters need to know.        

Wednesday, April 14, 2010

A challenge to Canadian journalists

Tomorrow is income-tax deadline day in the United States. In Canada we follow two weeks later on April 30.
As a journalist, John Stossel does not hesitate to skewer both people and practices that he feels stray from the ideas of fundamental liberty. Today he writes about the complexity of income tax in the United States, read it here.
Income tax in both Canada and the US has become part of our daily lives - like brushing your teeth and taking out the garbage.  Most things that we do on a daily, weekly or even annual basis are fairly simple. You shovel the snow, cut the grass, paint the garage - stuff like that. You might even hire someone to do these things for you, but that is strictly voluntary.
Income tax has become so complex that many people MUST resort to outside help, like John Stossel. Lets put aside for a moment the size of the tax, the questionable value for money that it delivers, and the coercive nature of this obligation. Why does it need to be this complicated? Where are the Canadian journalists that might inject this issue into the daily conversation?    

Monday, April 12, 2010

Raising the minimum wage (Part 2)

In Part 1, I pointed out that by arbitrarily ignoring productivity and increasing the cost of production (by raising wages) the government effectively creates money out of thin air. No new wealth is created by producers, but costs have increased. Ultimately more money must be printed (injected into the supply of money) to adjust to this new situation which devalues the existing supply of money and adds to what we call the inflation of our currency.
As for employers (the creators of wealth), their labour costs have been increased by government edict, and in order to stay competitive they must raise their prices or reduce there input costs by releasing staff.  This effectively prices the lowest skilled workers out of the "legal" workforce. In Ontario this month, employers must decide to either pay their bottom rung of employees $10.25 per hour, let them go, or shorten their hours worked. Alternatively employers may keep wages for their more skilled workers lower than they may otherwise be, creating a class of under paid skilled workers that cannot secure a decent living wage (more about that later).
I'm sure this Ontario government action, raising the minimum wage,  is motivated by the best intentions of helping the working poor; the irony is that it may be doing exactly the opposite.
The people of Ontario are fortunate to have one of the most robust and wealthy economies in the world and as a result we have one of the highest standards of living in the world. And yet by my strictly unscientific measure, poverty seems to be increasing.
In my experiences living in the Greater Toronto Region (GTA), one of the fastest growing regions in the country, poverty was something I was always aware of. While my own family struggled as I was growing up, I don't ever remember being hungry. In 1983 one of the first food banks was created to address the problem of hunger in the GTA. Now 27 years later, this and other food banks have sprung up and food donations during key holiday periods has become a ritual in our society. The food banks have persisted during good times and bad and they don't just cater just to the unemployed. Today in the midst of the Great Recession over 30% of food bank users are employed earning an average $10.90 per hour working an average 20 hour week. Food bank users have increased in those 27 years (by the way inflation went up 103% in that time!!) despite government programs to address the issue of poverty, and despite raising the minimum wage. In fact Ontario began a poverty reduction strategy called Breaking the Cycle in December 2008 with a set goal of reducing poverty in children by 25% in 5 years. All of this in my view is the wrong approach.
In my view raising the minimum wage increases inflation, increases unemployment and creates an underclass of workers that cannot earn a living wage. To get a better understanding of some of these issues let me direct you to some of these sites:
The Ludwig von Mises Institute; Economics in One Lesson; and the Freeman Online.    

Wednesday, April 7, 2010

John Stossel - What Am I?

Yesterday I suggested that people should check out John Stossel's Junk Science program on YouTube. I also noted why I like Stossel, and why I continue to like his work. It's almost as if he were reading my blog (not likely). Today to publicize his FOX Business Network show he writes "What am I?". Perfect, have a look.

Tuesday, April 6, 2010

Junk Science - A refreshing look at things we believe

I've watched John Stossel's rants about "Junk Science" for years when he was a correspondent on the ABC program 20/20. As a former science teacher I've even used Stossel's program in video tape form to help teach or at least stir up some controversy among my students.
Today Stossel works for the FOX Business channel, which I don't even get, but thanks to the magic of the internet and YouTube I can share with you Stossel's latest foray into deflating some commonly held beliefs regarding science. There are few journalists that I know that have the enthusiasm and passion of Stossel. Better yet he has a libertarian fire in him that no one can seem to quench. This is in five parts and deals with everything from nuclear power to global warming to plastic garbage bags. Enjoy:

Monday, April 5, 2010

Energy from Space

Last week in my "Earth Hour" rant I mentioned how human technology can distort carrying capacity and make a liar of Thomas Malthus . Malthus was one of the first to suggest the idea of limits to (human) population growth. The contrary influences of disease, famine, and war were outlined in his volumes Principles of Population. Of course he was proved wrong, again and again by the ingenuity of human technology.
Remember the whole Earth Hour thing was a reminder that we need to be aware of our impact on the environment and we must cut back our use of resources. For many this is a “motherhood” issue that has spread far and wide and is now infiltrating the public conscience. I can’t disagree with many of the ideas because waste is well, wasteful.
So when an idea is floated regarding energy production that is not the typical of the conserve, wind power, nuclear and solar capture stuff that is already out there, it may be wise to listen. Today in the Globe and Mail Neil Reynolds presents such an idea that may change the energy equation for the future and us. The idea is being pushed by the National Space Society and it even has a Canadian connection. The idea involves capturing solar energy in space (via a very large solar panel array) and "beaming" it down to Earth. Check out the pictures here. Interesting idea, could be a game changer, who knows.

Friday, April 2, 2010

Raising the minimum wage (Part 1)

Ontario's minimum wage increased as of March 31st, 2010. The general minimum wage increased from $9.50 to $10.25 per hour and so were several other wage categories clearly posted on this website. On the same day an article in the Globe & Mail by Jim Stanford (CAW) outlines his thoughts as to why this increase was "a reason to celebrate". On the surface it seems that this action by the McGuinty Liberal government was designed to assist the working poor and raise their living standard. But all economic actions have at least two sides and this action bears some close scrutiny.
In an unfettered market, wages and salaries are calculated by employers on the basis of the employees productivity. Productivity is a measure of the employee's output, and for a business to succeed, that output must be greater than the price of the employee (wages) and  all of the support costs that allow the employee to be productive. The difference is profit, and maximizing profit is the goal. Employees that achieve that goal, deserve a fair wage, and in a competitive market their skills can be shopped around to the highest bidder. Every employee has a price (wage level), usually commensurate with their talent, skill and experience. As these increase, the employee becomes more valuable and in an unfettered market the employee can demand a greater price - to a point.
When a government steps into the market and arbitrarily raises wages (across the economy) , it does so by ignoring productivity. The government only looks at one side (employee) of the economic equation. The link between the price of labour and the price of good and services is irrelevant to the government action. In fact the government assumes that employers will somehow absorb the added cost. What if the employer passes on the cost by increasing the price of their goods or services? What if this happens throughout the economy? The costs are passed on and prices for goods and services increase. Does this benefit employees? I think, eventually they are back to where they were in terms of living standard. Am I wrong? (Part 2, later).