Thursday, September 30, 2010

Our crystal ball sucks

The future isn't what it used to be. In my younger days I was an avid reader of Popular Science and magazines of that ilk. It was common for these periodicals to feature the newest and latest gizmo or idea. The future was bright with hope and promise. We were all supposed to be driving flying cars by now. But during the 60's and 70's the prognosticators missed predicting the internet and the impact of computers and mobile devices. Details.
Predictions are virtually impossible to get right. My neighbourhood psychic is still in business (the lights are still on anyway), not yet independently wealthy by predicting the winner of a horse race or winning stock in the market, or anything really.
Predictions lately have been downers, bird flu will cause a pandemic (not yet), H1N1 will cause a pandemic (didn't), the planet is in peril, well that remains to be seen. Al Gore thinks it is, but he is rich and now single again! He also has tons of credibility, Nobel Peace Prize, Oscar winner on his only movie and he lives in a great house - but its green, not the colour.
One of my favourite prognosticators of late is David Suzuki, whom I've actually written about in my other more local blog. Suzuki is a metamorphosed-fruit-fly-geneticist-become-environmentalist. He's making lots of predictions, kind of like the Canadian version of Al Gore, but poorer, leaner and more grizzled but just as gloomy. He also travels lots and I bet he lives in a great house in the woods of British Columbia, but I'm just jealous. Lately he is getting lots of press, a new movie doc about him is out, he has a new book and a foundation and his thumb in every "green-program" in Canada. He is worshipped by some and he is a first class bullshitter, much like Al Gore.
David Suzuki is mentioned in a column by Dan Gardner in the National Post this week. Gardner wrote a book coming out soon called:
Future Babble: Why Expert Predictions Fail and Why We Believe them Anyway (Oct. 12, 2010). The article outlines some of the classic previous failed predictions by environmental groups and people: Limits to Growth, The Population Bomb and so on. It's an interesting read and I can't wait for the book.        

Monday, September 27, 2010

Notes from the trenches on morality, a debriefing.

Out of necessity I try to shield myself from bad politics, which is to say any politics that has coercion as its modus operandi. Lately that has meant subscribing to a different newspaper, listening to different radio stations, following libertarian "friends" on FaceBook, generally just not dealing with the real world, I think it brings down my blood pressure. Sure I keep up with the news of the day and sometimes blog about it, but meeting others is restricted to family, friends, and libertarian pub nights (preaching to the converted). I'm in a libertarian cocoon much of the time and its comfortable. 

This past Sunday presented a chance to interact with the unwashed masses. The Ontario Libertarian Party with my help, presented Operation Politically Homeless (OPH) at Toronto's Word on the Street book festival. Our primary goal is to uncover latent libertarians and bring them out of the closet by joining our cause. Sunday was a good day for the cause, we spoke to hundreds I'm guessing, and some of those were interested in what we offered.
As far as my blood pressure, lets say there were some moments. One of my favourite rebukes goes like this: I had just finished explaining that eliminating various government programs may reduce taxes and give individuals more spending power. It may also lead to larger charitable donations so that those people who depend on charity will get the help they need. It's a perfectly reasonable argument, but I know people who have their mindset on the state as the source of all good, never buy the argument. Several times during the day I was told: "but many people don't or won't contribute to charity, that's why we need those government assistance programs that alleviate poverty and taxes to pay for them!" If you don't give voluntarily, you will be forced. Coercion is a tough nut to crack.
Earlier in September at one of our pub nights we invited Stefan Molyneux of Freedomain Radio (FDR) fame. We had a great turnout including several that had never been to one of our pub nights. We had asked Stefan to speak about morals and ethics with respect to libertarians (see video below from an older FDR posting about the morality of coercion), which he was happy to do. During his talk he used the example of the paradigm shift in thinking that occurred between the time slaves were freed in one country to the present day when just about everyone views slavery as abhorrent. Certainly that was not the case throughout much of history. Even Thomas Jefferson who penned the Declaration of Independence, owned slaves. It took more than a thousand years from the time of Cyrus the Great of Persia until 1981 when Mauritania finally abolished slavery. Of course most of Europe and the Western World was free of slaves by the end of the 19th century. The brief exception being the slave labour camps of the Nazi's, composed mostly of Jews (including my parents and inlaws) and the Japanese Prison camps of the Second World War. Stefan Molyneux likened this shift from 'slavery is good - to slavery is bad' as the requirement before libertarians will form governments in the West. The idea that people/governments have the right to coerce individuals to pay for goods and services they would not support voluntarily, needs to become as abhorrent as slavery is today. I hope it doesn't take a thousand years, but I fear we are still a long way from it.

During that OPH day, some suggested that we (meaning libertarians) can "ride the wave" of protest that exists particularly in the States, you know the Tea Party protests. Our day has arrived they said, wait until the next election! That was not the impression I got from most of the people I spoke to. On the contrary when I mentioned 'libertarian' to many, they linked us to Tea Party lunatics they had seen or read about in the media. No, the Tea Party is not helping our cause.

Towards the end of the day while speaking to an older woman I asked the question "does government do a good job?" She asked, which government? I said we are a provincial party, but any level of government will do, they're all the same, you choose. She looked at me like I had just stabbed her cat, she was indignant. "No, they NOT all the same" she whined, and stomped off. Yes, they are!      

FYI, here is the video where Stefan Molyneux explains why Ron Paul will not achieve power and even if he did why the population is not yet ready for a libertarian type government. It's the slavery paradigm, the shift in thinking must happen first.

Saturday, September 25, 2010

Legislating the end of poverty

That is a picture is of an American Food stamp, one of the myriad ways the US government has tried to end poverty. That government currently operates 122 programs which spend $15,000 for each and every individual in the US that is designated as poor. This information and much more was presented by Neil Reynolds in his most recent column this week. The American war on poverty continues, 46 years after Lyndon B. Johnson fired the first shot in 1964.
That futile war is fought in the States, in Canada, and every "well-meaning" democracy on the planet by each particular local government.
The other day a colleague of mine repeated an old aphorism that applies to this sort of futility: What's the definition of insanity? Repeatedly doing the same thing but expecting a different outcome each time. Buying the end of poverty doesn't work.

Friday, September 24, 2010

The politics of letter writing

Aside from blogging I keep the editors of the local and national newspapers busy with a regular stream of letters. My letters have appeared in a variety of newspapers and magazines over the years. This week I sent my first letter to the National Post, it was published and the online version appears above. My record is more spotty with other papers, this was first-time-lucky and I appreciate the opportunity. However my letter was edited so much that my argument was altered, see if you can spot the differences.

Re: Alberta Sands praised as ‘ethical oil’. Adam McDowell, Sept. 22

To the Editor:

I think that reframing the debate by called Alberta’s Oil Sands ‘ethical oil’ is disingenuous, like putting lipstick on a pig, its still a pig. Any kind of oil exploration and production is dirty business; witness the Gulf of Mexico oil debacle.

The ethical focus should be on the producers. Are they responsible enough to clean up after themselves; are they minimizing the impact of production so that the people of Alberta are not stuck with an environmental mess for generations afterward?

Oil is an essential ingredient of modern civilization, it should be traded with as few restrictions as possible, and the market should dictate its price. Alberta should not be ashamed of its good fortune as a major player in oil production. Calling it ‘ethical’ or ‘fair trade’ oil because it comes from Canada as opposed to Saudi Arabia or Nigeria is of no consequence to me, I shop for the best price.

Danielle Smith should reconsider her support of Ezra Levant’s book; it is shortsighted thinking. If ethics dictated trade we should refrain from travel to Cuba or from purchasing Chinese manufactured goods because of human rights issues. That’s wrong, it is trade that brings about change.

If the Americans don’t want our “dirty” oil, someone else will.     

My letter was based on this article. It talks about Ezra Levant's book and how Danielle Smith of the Wildrose Alliance picked up the argument. Full disclosure: I haven't read the book, but I have read about it, this fairly positive review was in the Financial Post the day before my letter was sent.
I admire Levant and I agree with him on many issues, probably even this issue, given the provisos in my unedited letter. But the day after I wrote the letter the National Post ran a lead editorial supporting ethical oil, and not mentioning Levant or Smith. My letter appeared the following day, edited so as to make it look like it was written in response to the lead editorial. While I know the newspaper reserves the right to edit whatever it is sent, this seems fishy to me.

Thursday, September 23, 2010

Government interventions create economic niches

According to George Jonas that is what governments do "create economic niches"; he goes on to say: "criminalizing conduct makes it pay"  in his recent The National Post op-ed.
The Post is running a five-part-series on the sale of "illegal" cigarettes by members of First Nations (natives) groups in Canada. Jonas points out that a black market in cigarettes does not exist....."That's the first thing to know about it. Markets are colourless. "Black market" is what the authorities call whatever segment of the free market they want to restrict for whatever reason."
I'm the last person you would expect to defend cigarette smoking or any other kind of addictive habit, but sometimes freedom means 'letting go' and allowing some behaviours to go on as long as they only affect the user. This is such a case, and Jonas's column is worthy of your time.

Tuesday, September 21, 2010

The race for mayor in Toronto

Municipal politics in this country is typically boring. Not this year in Toronto! The campaigning seems interminably long compared to what happens at the provincial or federal level. At those upper levels, campaigns have been legislated down to just 4 weeks or so. This way the incumbent party can't screw-up too badly and they may be able to finagle another victory.
Not in municipal politics, the Toronto campaign has been in going full-bore (no pun intended) at least three months now and there is still a month to go. In this particular year that is the best thing about it.
One unlikely candidate, Councillor Rob Ford, has emerged with a substantial lead if polls can be believed. He has almost twice the percentage in favour as his closest opponent. Even I like him, sort of.
Toronto has the reputation of voting federally for union-friendly statist politicians. Liberals or New Democrats get elected throughout most Toronto ridings. Even the last mayor and council were big government types and of course their big spending ways have created a huge debt problem for the city during a bad economic downturn.
The current Mayor Miller is known for "negotiating" juicy contracts with unions (like garbage workers), adding all sorts of annoying surcharges for the privilege living in the city and slapping red-tape on anything that looks like progress. Wisely, Miller has decided not to run again because the pendulum is swinging the other way.
The new mantra is responsible government, ('cause they have been irresponsible up until now) even so some candidates insist union jobs should be saved, tunnels should be built for cars to travel unimpeded, transit should be improved and every pot should have a chicken in it.
Ford has a better idea. He is the only one suggesting that cuts need to be made in the size of government. He's still a big government guy (and he's big too) a union-unfriendly statist politician, so I'm not that excited. But the length of the campaign has focused those voters who are paying attention on costs and size of government. That may be why Ford is popular, but it's early days yet.        

Sunday, September 19, 2010

Thursday, September 16, 2010

Economics and basketball

Neil Reynolds highlights George Mason University and it's surprising basketball team. More importantly he uses that example to take a kick at Keynes and chalk up one for the Austrian School. Have a look here.

Wednesday, September 15, 2010

Education in Ontario - Striving for Mediocrity

The first few weeks of September have always been a special time for me. As a student, these were the beginning days of a new school year. As a teacher, same thing but from a totally different perspective and with totally different challenges.
In Canada, education is the responsibility of the provincial governments, and because I taught in just one province for 35 years I'll try to restrict my remarks to it, Ontario.
The people here have an unwarranted smugness in their belief that we have a pretty good system of education, after all todays adults by-and-large are products of that system, so it must be good. Of course it really is difficult to distinguish Ontario from any other jurisdiction because education has become the responsibility of the local government. Across Canada and the United States the vast majority of students were taught within the "public elementary or secondary" system and the similarities, unfortunately, are greater than the differences.

Ever wonder why government controls education yet allows people to fend for themselves when it comes to really big things like clothing, food and shelter? Aren't those a little more important (I don't want to give the statists any ideas) than readin' ritin' an' rithmetic?  Do you think the reason has anything to do with control?  Thats right control and indoctrination. I hope I'm not starting to sound like a conspiracy theorist, I'm very far from that believe me, and I don't really believe governments are that effective in our democratic system. No, public education in Canada began with the one group that is that effective and diabolical enough to want control and indoctrination: the church.
The earliest Canadian schools were instituted by the local priesthood like the Jesuits in New France, which later became Lower Canada and then Quebec. That model was used in Upper Canada (now Ontario) where Egerton Ryerson realized that the Jesuit's success could be translated to a more secular state-controlled school system. Ryerson saw this as one way to assimilate the immigrant hordes, the alien elements that had just arrived, into the ways of their new country. That model is the foundation of the Canadian system of education: control the curriculum and mould (if you can) the population throughout their formative years.
If you don't believe that, consider the Residential schools that "moulded" First Nations children to be fine upstanding Canadian citizens. The unacknowledged purpose of those facilities was to effectively "kill the Indian in the child". We are still dealing with the mess that experiment has left behind.
That's not the only vestige of our earlier history that still affects us in Ontario today. Ontario supports a Roman Catholic school system with public tax money to the exclusion of all other religions. Some will argue that is a constitutional responsibility, but that does not make it fair or reasonable. A recent election (2007) during which taxpayers support for all religious schools was an issue was soundly defeated. So Ontarians don't like the blending of church and school, yet they tolerate the Catholic incongruity.
Education is the number two largest component of the Ontario budget (next to Health Care) and each year Education costs seem to rise without any marked improvement in outcomes. The Fraser Institute produces report cards for Ontario schools based on standardized tests given to students in particular grades. The results are mediocre at best for both Elementary and Secondary schools with little or no improvement given the budget increases. These Fraser Report Cards have become a bone of contention for the teacher's unions, because it exposes their inadequacy. One union actually wants to stop giving the standardized tests because they emphasize literacy and numeracy to the exclusion of other parts of the curriculum, imagine that.
Premier Dalton McGuinty seems to be proud of his record of increasing education spending with such things as all day kindergarten. McGuinty thinks that earlier education somehow improves later outcomes. While that seems to be intuitively correct, there is little evidence to support it from other jurisdictions that have tried.
Ultimately the problem in education as is true in so many so-called government responsibilities, boils down to choice. If "choice" works in food, clothing, housing and so many other areas of our lives, why would it not work in education? Why must there be one official curriculum in Ontario? Why must all parents (and taxpayers) support the one school system with their tax money? Why must parents who send children to private schools pay twice?
Here is another view, a more libertarian view. Try and have a good school year.

Sunday, September 12, 2010

Winner of the Underground Economy Contest!

That's what it says, did you know there was a contest? Hell yeah!
I found this by accident, those of you who are being fleeced on an instalment basis by the CRA, the Sept. 15th deadline is coming up fast! I found this "clever" video by accident. The CRA is actually enlisting citizens to help them write and distribute propaganda (Herr Goebbels would not approve). I've included below the YouTube video (about an evil barber) that was the First Place English winner! If you want to tell CRA how much you enjoyed this video why not click this link and choose "like or dislike". Tell your friends, spread the link, the CRA loves you and wants your money.

Tuesday, September 7, 2010

Why Ontario electricity costs are going up and up!

Ontario residents may have noticed that their electricity provider has increased the per kilowatt-hour rates for use. One cause of the increases can be traced to a report published by the Ontario Clean Air Alliance (OCAA) in March 2008 (Eliminating Subsidies and Moving to Full Cost Electricity Pricing by Jack Gibbons) suggesting that subsidies to the production of electricity of almost $8-billion annually should be eliminated over a ten year period (at 3.5% per year) to bring Ontario more in line with other jurisdictions in North America. Subsidies became policy because it gave Ontario a “competitive advantage”.  As in any economic situation that only looks at one side of an issue, that “competitive advantage” is coming back to bite Ontarians. The genius that created the subsidies neglected to consider that they might discourage energy conservation and investment in small-scale generation, and they have. The article from OCAA also points to a resulting “productivity gap” between Ontario and neighbouring competitors such as New York State, which uses just half the electricity compared to Ontario to produce one dollar’s worth of GDP. While the subsidies were a bad idea to begin with, the story behind the additional increases gets much worse.

The local utilities appear to be the villain in this story but they simply distribute electricity for their municipal shareholders to the consumers. The real villains were previous governments who created the subsidies.  Now the McGuinty government is compounding those increases in its rush to be green at all costs – mostly yours.

Over 100 years ago competitive cheap hydroelectric power became widely available to businesses and residents of Ontario and it became the industrial dynamo of Canada. We still benefit from that very good start, but today, rather than encourage a competitive market in the production of cheap electricity the McGuinty Liberals are doing the opposite. They have made long-term deals with various companies (like Samsung Corp.) to purchase electric power at rates far in excess of the current market price of 4.5-cent per kilowatt-hour market rate (a 100 watt light bulb could run for 10 hours for 4.5 cents).

As a result Ontario will be forced to buy electricity at between 13.5 and 44.3-cents per kilowatt-hour (kWh) for the next twenty years from various solar and wind power companies. Recently (Aug. 13, 2010) McGuinty renegotiated a deal with 16,000 solar power project applicants to pay them 64 cents per kWh (down from an initial 80 cents) when they come on-line in the near future. Remember, these are intermittent power sources (no sun/wind no power), so “back-up” fossil fuel sources will be standing by (at additional expense because McGuinty is closing the cheap coal burning plants).

These massive subsidies to green energy are a result of policy brought about by the Ontario Green Energy Act (2009) which was shepherded through Queen’s Park by the powerful lobby group the Ontario Sustainable Energy Association (OSEA). Under the new Green Energy Act, former Energy Minister (now Toronto mayoral hopeful) George Smitherman (also of e-Health infamy), directed Hydro One to connect to the new heavily subsidized solar and wind power generators at a cost of $2.3-billion (the ones that will get 64-cents/kWh for their power). The OSEA claims to speak for Ontario ratepayers and it has exerted its influence through another group: the Green Energy Act Alliance (GEAA). How do these groups get funded? Well, it’s almost incestuous.

A recent article in the Financial Post (Aug. 17, 2010) by Parker Gallant points to a list of sponsors including: the Ontario Trillium Foundation (it distributes lottery revenue), the City of Toronto Atmospheric Fund, Ontario Power Authority, the Ministries of Energy, Natural Resources, Environment, Aboriginal Affairs, Hydro One and on and on. Its largely tax money that is influencing government policy, not public input.

In November 2009 OSEA held its 1st Annual Community Power Conference. The sponsors above plus a few other branches of government and a very few private-sector sponsors that directly benefited (law firms, equipment importers, unions) paid for the conference whose Honorary Chair was David Suzuki (his foundation also gets money from Trillium above). The keynote speaker was then Energy Minister George Smitherman who is slated for this year’s conference, too. Somehow in all this the word “cozy” seems inadequate to describe how Ontario’s electricity policymaking works.

Is it possible to find a more expensive way to produce electricity than the McGuinty Liberals have? I doubt it. Imagine what kind of competitive position this creates for Ontario businesses for the next 100 years. Of course the new HST adds an additional 8% to your electric bill, as it will continue to go up and up.

This article was excerpted from the Fall Issue of Libertarian Bulletin the Newsletter of the Ontario Libertarian Party

Monday, September 6, 2010

The Dishonor of Militarism

The Dishonor of Militarism

Competition in government?

Today is Labour Day (yes, with a "u" in Canada) a holiday that celebrates organized labour (that picture from a Labour Day Parade in Fort William ON, 1903). This morning The US Heritage Foundation blog suggested that today should be called Government Day. In the US this is the first time that public sector unionized government workers outnumber private sector unionized workers. Unions have become a casualty (or is it causality? both?) of the recession/depression. In Canada it's likely similar, but maybe we're not there quite yet, certainly the public sector is rife with unions and the various levels of government seem to be in cahoots with their unionized employees. That of course is the problem, the public sector unions virtually eliminate one of the key features of bargaining, that is, looking for less expensive help, union rules prohibit that. Some of you may say that is the point of unions, the workers are protected. Certainly thats true, but who protects the tax payers? Is it elected officials that represent taxpayer interest? Of course it should be, but look at the job they have done.
Public sector strikes are fairly common, but in the end government negotiators generally cave in with offers in excess of anything available in the private sector. A recent Toronto garbage strike ended with unions getting a much better deal than private contractors give their workers.
Public sector construction contracts regularly requires unionized workers to carry out any work. In the Toronto region, electricians doing public sector work get between $34 and $36 per hour. The average hourly rate for non-unionized electricians work is $26. Now multiply that percentage difference (38% more) by all the public construction projects and its easy to see why government costs continue to rise much faster than the rate of inflation and governments go into debt. The elected officials who are responsible rarely get blamed, and if they do, they don't get re-elected but the new officials aren't any different. There is no competitive other government to take over (most political party's once in power act the same as their predecessors), the business of government is monopoly with minimal change every four years or so.
So imagine if there were alternate, but competitive governments, in other places to live that actually offered a competitive price structure. Somewhere where freedom is valued and competition exists in everything. That's the idea behind the Seasteading Institute, explained in this short video for young people.

Saturday, September 4, 2010

A sovereign debt and currency crisis?

Maybe I've been watching too many Peter Schiff videos lately, but I'm getting more concerned about our financial future. By "our", I mean North America, we are effectively a common market. The old joke about the Americans sneezing and Canada getting the flu is well know in these parts. Everyone says Canada is in good shape compared to our neighbour, but as I have said before if your biggest and best customer has money troubles, then how good is your business?
The stock market doesn't seem phased, it's been in rally mode this week - but with lower volume. I'm not an economist but I know volume can be a sign of conviction and enthusiasm. The lack of volume says something else, or it could just be the end of summer.
I know I said I wasn't an economist but I have managed my family affairs so that we have no debt and some savings. I always thought that debt was something you wanted to reduce as quickly as possible, and there really is no such thing as good debt (contrary to what many advisors will say) even if it is a mortgage or business loan. Debt means you are not in control of your future - the debt holder is. The more debt the less control you have, so getting rid of debt is always a good idea for individual, families and governments.
So when the financial crisis of 2008-09 occurred, as a result of excessive debt it wasn't a surprise. Peter Schiff was right. The debt owed by homeowners became more expensive because interest rates rose. Many found the new rates beyond their ability to pay, sold or abandoned their homes and the rest is history. Prices for US homes fell significantly for the very first time. The resulting recession, according to several knowledgeable people (including Peter Schiff) is just the beginning. That argument is clearly explained in the following video which is about 45 minutes long but well worth your time.