The real and painful effects of Climate Change on Ontario Part 2

In my last posting I discussed the erroneous prediction made by a consensus of weather forecasters from across North America for the winter of 2011 - 12.

Suppose you were a retailer in Ontario this past winter and you actually took seriously the prediction that the winter was going to be brutal, cold, and snowy. You acted on that prediction and pre-ordered extra snow blowers, shovels, snow-boots and other wintry paraphernalia. The erroneous predictions were based on computer models used by forecasters. Now your decision has left your business with a surfeit of winter stock and a cash flow problem. Too much cash is tied up in too much stock, and not enough cash is on hand to restock for the new season.

That very situation may have played out for retailers recently. Should they liquidate the excess stock at fire-sale prices and accept losses, or hold it until next winter while borrowing money for the new season? What to do?

This problem of course is mostly confined to the retailers, wholesalers and their employees. It is a risk of doing business. The general public may be advantaged by the potential fire-sale prices, but presumably they will not be affected by the problem because those businesses operate mostly in a free and voluntary market.

Unfortunately that is not the case with regard to the production of electricity in Ontario. The government of Ontario operates Ontario Power Generation (OPG) as a near monopoly for the production of electricity in Ontario.

When the McGuinty Liberals became the government in 2003, they completely accepted the United Nations IPCC forecasts for future catastrophic global warming (AGW) due to "excessive" carbon dioxide gas (CO2) emissions from fossil fuels. These forecasts were determined by a consensus of researchers using long range computer models and data that was collected.

Despite our normally cold winters and comparatively meagre population, Premier McGuinty's government ordered the shut down of most of the coal burning power generation stations in the Ontario. The purpose was to replace these low cost electricity producers with alternative high cost wind, and solar generators that do not produce CO2 (that was key). The McGuinty Liberals even offered inducements (FIT and MicroFIT) to landowners to construct these generators on their properties across the province. It worked, OPG now produces less and less electricity though the price of production continues to increase because of the high cost producers. Check out this recent column which details what is happening.

So, much like my hypothetical retail story above, and based on long range climate predictions that may or may not be correct,  the McGuinty Liberals have made a decision that affects all Ontario consumers now, and into the foreseeable future. It wouldn't be so bad if we had the choice today of opting out, but that's not the way things work in Ontario. Unless you are self-sufficient in electricity production, you are paying more and more because of McGuinty's actions and that trend will continue.

Interestingly the IPCC's predictions of five years ago can now be compared to reality. That is what the graph below shows.

The graph is taken from here. The graph's author contends that while the climate is currently warming slightly, there are other cycles unrelated to CO2 that cause variability. The blue area denotes the range of the variable cycles, the red and blue line denotes actual data, and the green area shows the IPCC 2007 projections for temperature. The yellow line shows the author's projections based on his theory (which is more in agreement with the real data).
It's a bit more complicated than that, but that is the gist of the graph. There is now a divergence between the real data and the IPCC projection that may increase with time. If it does, it just confirms my case that the McGuinty Liberals have acted prematurely and rashly. Ontario will suffer real economic pain from global warming, whether AGW is real or not. And because there is no free market in electricity production, we have all been coerced into this situation.

You might be asking how can I be certain that the McGuinty Liberals are assuming that CO2 is the cause of climate change? Watch this short video:    

Is there any doubt now? The Environmental Commissioner of Ontario, the Provinces' INDEPENDENT watchdog for environmental issues, has no doubt! Did he sound independent? Can you imagine a more bullshit job than this in government?

If you want more information about how your Ontario government is wasting tax revenues and borrowed money go here.    

The real and painful effects of Climate Change on Ontario Part 1

The snowdrops and crocuses are blooming in my yard, weeks earlier than I've ever seen them. It has been a strange winter. Normally, the park abutting my yard is covered in snow from December through to March, even longer some years. This year it has been winter green, punctuated by brief periods of whiteness that melt in just days. There were no extended cold spells, I mean really cold spells, where it hurts just to be outside for too long. The local pond near my house, never did freeze up for skating.

Predictions for the winter of 2011-12 were way off (see picture above). Most weather offices predicted this winter was to be colder and snowier than usual, they predicted a winter of yesteryear. It didn't happen. So much for long range predictions.

This may be the mildest winter in my memory, I know we're not done yet, but how bad can it get at this point?

Apparently winter was absent from much of the country according to the latest issue of MacLean's (The year that winter died, March 26/12). They viewed it as a concern. What if there are no more backyard hockey rinks? Where will we nurture our future Gretzky's and Crosby's? Oh woe is Canada, what will happen to our national identity, hockey? Despite that, no one around here is complaining, quite the contrary.

Why was everyone so wrong? Weather people are blaming (thanking?) something called the Arctic Oscillation for this anomalous winter behaviour. Indeed winter was brutal in some places, ask the Europeans. Much of Europe and Asia was gripped in the kind of weather we expect here.  

Of course one winter, does not a trend make, so I'm not selling my snow shovels or snow tires yet. But I am convinced that winters around here are getting milder, and have been for some time. How do I know? It's not that I keep meticulous records and can recall past winters, its that I can see evidence in the plants and animals of southern Ontario. I have seen changes, subtle changes in the indigenous wildlife, for example: Turkey Vultures were once rare visitors this far north. No longer, they now range into Central Ontario (that video link is a clue as to how rare they were) each summer, they regularly soar over my town near Toronto, and have done for years now. Opossums, once rarely seen in the Toronto area, are now becoming a nuisance and can be found north into Central Ontario. Robins are found year-round in Central Ontario, and this year tree pollen was detected in Pittsburg in February, earliest ever. Yes, these are subtle changes, and the truth is change has always occurred. This area was once covered by a continental ice sheet, and my house is just south of a large moraine leftover by the glacier's retreat.

There is nothing painful about these changes, they are easy to adapt to. Even the temperature changes are on average minor. Next year is libel to be as cold, snowy and as bad, as the winter of 2008 - 09.

What I found remarkable this winter were the lack of claims by the anthropogenic global warming (AGW) crowd that our strange weather is a direct result of what they call "carbon pollution." They have been strangely quite. It may be because they have been embarrased, like here. Or because the theory of AGW caused by greenhouse gas emissions is falling into disrepute, as more and more scientists support the theory less and less like here. Its clear that the dire predictions of the IPCC are not in line with reality (see graphic below).

This graphic comes from an article published in Forbes magazine, where Warren Meyer compares the AGW theory with observations, and finds the theory to be alarmist and unrealistic. Meyer does not dispute the warming or even the possible insignificant impact of CO2, he just argues that the predictive models are hyped far in excess of the actual observed data. That alone should be enough to sink any theoretical model, but this theory, like a zombie seems to cling to life.

Here is where the problem occurs. Belief in that theory and the actions taken as a direct result of it, has caused and will continue to cause the people of Ontario unnecessary grief and expense. The real and painful effects of an erroneous theory are right now taking their toll on the economic freedom of all Ontarian's.



       

"Liberty is not Intuitive" - John Stossel

Things are changing.......

Preaching to the choir is not challenging

Do you ever ask yourself what would you be doing if it weren't for the internet? Something useful maybe eh?

If you use Facebook, then you know its another way that the whole internet thing steals time. But you will also know, and I'm not exaggerating, that Facebook and the other social networking tools, are changing the world in ways we can't yet imagine.

What would be the state of the libertarian movement were it not for these tools? Would there be such a movement? I doubt it, at least not to the same extent. With Facebook I can interact with libertarians around the world, sharing thoughts, ideas, stories, pictures, you name it, and do it in real or delayed time, it's absolutely remarkable. That's the good news about these tools, and the bad. Bad, yes bad? Most of my "Facebook friends" are libertarians or liberty-minded, we form little groups and cliques where we share common likes and dislikes among ourselves, just like in the real world. By and large we have common views on many issues, and any discussions while lively, are frequently philosophical in nature and minor in the bigger picture. We are preaching to each other much of the time, and that's fine. We humans crave re-enforcement of our ideas and we do that a lot on the social networks.

I use the internet mostly to peddle ideas. But to be most effective its best to get into a group which is not homogeneous and not necessarily in line with my thinking even though that can be uncomfortable.

Below I have taken a comment from a Facebook thread that dealt with the cartoon you see above. Most libertarians with some knowledge of Austrian economics, like me, look at that cartoon and will agree that shifting the burden of taxes from individuals to corporations doesn't really lift the burden of taxation, it just shifts it. It may not be exactly as indicated in the cartoon, but corporations  don't pay tax to their own detriment, they just add the tax to their cost of doing business, and we all end up paying more. Government spending requires tax revenue, everyone agrees with that. So the discussion on my non-homogeneous Facebook group revolved around this issue, and one person, let's call him James, who wrote the following:          

"Alright. Where does the money come from? The consumer wants their social benefits. The consumer wants their pension plan. The consumer wants green jobs which only can come with government subsidization. The consumer wants unlimited free healthcare with a low wait time. The consumer wants state day care programs.

Well guess what, all those programs cost a lot of money. It's either cut those programs or raise business taxes. I've been in small business literally all my life, and I am pro small business. At the same time, the same politicians who advocate on a stronger economy don't have the balls to cut social programs relentlessly so that business' can actually work efficiently. Large corporations will not be hurt by tax increases, there's always ways around it - I work in that industry. Will it be passed on to the consumer? Not really. Prices will stay marginally the same as business' find new ways to stay competitive. This means firing a few people and keeping the innovative ones to find ways of keeping the bottom line strong. So, like minimum wage, more taxation will probably mean a few people could potentially be cut.

I'm not for raising corporate taxes as corporations provide jobs. What I am all for is raising taxes on the bracket of tax payers who make 1m or more, at least in the US (where the rate is at its lowest in 50 years). Basically the government raising taxes on business' is a spineless move. Politicians don't want to lose votes of a majority of society who will complain when they make social programs more efficient through cost benefit analysis, so they raise taxes instead.

At the same time, the massive government programs we have provide a great deal of work to the private sector, so cutting those programs will have a backlash to.

As I said, more complicated than this. This comic is actually more incorrect than correct. Why? Because the alternative is to cut social programs which will see a lot of government workers without a pay cheque which will lower their purchasing power affecting all small business. No matter what the government does to cut the debt, it will affect the consumer most likely negatively. Why? The last 40 years we mortgaged the future, and now our interest and principal are due."

Its difficult to respond to comments like that from a free market viewpoint with short pithy retorts. This person has practical knowledge of business economics, the implications of tax cuts, and the popularity of entitlement programs. So where to start?

In the first paragraph James outlines "consumer wants." The fact is consumers want many things, fortunately not all of them are provided by government, unfortunately many are. So my first issue is why is government involved in, pensions, green jobs, healthcare and daycare? Can government do a better job providing these services than the free market? If that were true than why doesn't government provide ALL of our needs? One of the reasons that doesn't happen is that consumers also prefer choices. Government rarely offers choice and almost always creates monopoly situations. In fact government does nothing better than the free market in my experience. But James is correct, money for these services must come from somewhere or the services must be cut. Politicians are reluctant (James says: "spineless") to make the cuts so they either raise taxes or worse, borrow the money. In either case, the economic freedom of citizens is affected. 

But where I disagree most with James is his contention that: "the massive government programs we have, provide a great deal of work to the private sector." Is that true? It is, if only one side of the story is examined. Look at the government monopoly in healthcare. Government together with various professional organizations agree on a compensation packages. The government takes on the responsibility of payment. The private professional organizations regard the government treasury as a bottomless pit. The government arrangement eliminates free market competition between the various healthcare providers, and as a result costs always go up in healthcare. 

The bottomless pit characterization holds true in many areas. Whenever government puts out tenders for construction or any sort of purchase, they may accept the lowest bid, but the bidders know who they are dealing with. Not to mention that virtually every government worker is ensconced in a labour union, and their demands depend on the bottomless pit idea too. It's no wonder that government workers have some of the most generous compensation packages around. No one asks why should the unions be the sole providers for government services?

So yes its true, lots of work for the private sector, but are we getting the best value for the money spent? This avoids the moral question, is it reasonable to make everyone pay for services that they may not even use? Governments create uncompetitive, overpriced, over regulated services that everyone pays for whether they use the service or not. The entire process depends on coercion administered by government and mostly unchallenged by citizens. At some point, the citizens will wise up. I hope it happens soon. There will be short term pain, yes, but all successful surgeries require healing.  

The Cato Institute?

The Cato Institute needs to be an independent, APOLITICAL, libertarian, think tank. I hope it stays that way.
The Koch brothers have launched an extraordinary campaign to take control of America’s most respected libertarian think tank. Will they destroy it?

Signs of Hope & Change 3

This month marks the beginning of my fourth year blogging online. I have over 500 blog posts, coming up to 41,000 page-views, and I'm still learning how to use this wonderful tool.

Why bother? Only because I believe, perhaps naively, that I can make a difference, I can help change things for the better. That's why I've jumped into politics after spending most of my life being apolitical.

Politicians and their antics seem to dominate the news media in North America. While I haven't done a survey, I'm sure that's true. Even though I've become political, I don't really want to be in the news, I just think our lives have been manipulated by political agendas for far too long, and that has damaged individuals and society as a whole. There needs to be a counteracting force.

The world is run by busybodies that inhabit various political offices, legislative assemblies, parliaments and congresses. To justify their own existence, these political entities are forever busy dreaming up new legislation that almost always adds to the cost and size of government, while at the same time removing money, freedoms and responsibilities from individuals.

Most interesting to me is that with all the political shenanigans that have gone on and are going on, very few if any of them have an impact on improving our lives, our living conditions, or anything else of value. On the contrary, think about it, when was the last time a political decision had a significant positive impact on your life?

But our lives have improved despite governments, how? Peter Diamandis explains in the TED video below that things are getting better. If you have heard of the X-Prize, then you may know Dr. Diamandis. The X-Prize, does what governments around the world notoriously appose, it incentivizes human competition, governments of course, do the opposite. The X-Prize leverages the human mind and the free market and gives us all reason to be optimistic and hope for better things.  
        

Political Irrationality

Are you politically irrational? In the TED video below, Michael Huemer points out two of the more glaring politically irrational policies that exist in the present day United States. These policies exist in most Western societies to some degree, Canada is no exception. Libertarians will agree that BOTH of the examples that Huemer uses are indeed irrational. Conservatives will agree with one of them, Socialists will likely agree with the other one.

I know generalizations are dangerous, but Huemer does suggest that a different group of people may agree with one or the other. For those of you that don't understand libertarianism, maybe those examples will help?

Huemer goes on to suggest that the reason policies are often irrational, is because most people are politically ignorant. In my experience that is a fundamental truth of politics. I think Huemer gives a good explanation and then he surveys his audience to validate his explanation.

Huemer then goes on to explain why people are irrational. Being rational is costly, his first point. People will be rational if they believe the rewards exceed the cost, but most people understand that they have just one vote to affect change. So why bother thinking rationally? At this point, Huemer suggests that its easy to persuade most people, that most people are irrational about politics, absolutely true.

So why do we need people to be rational about politics? Well, you should watch the video, he seems to spend the least time on that, but it's the most important point in the story. 

Stossel at Students for Liberty

In this video clip, John Stossel explains that he has discovered that liberal progressives are closed minded and impossible to talk to, with respect to liberty compared to social conservatives. I happen to agree, having experienced the same thing.
Nick Gillespie offers hope.

Gay marriage, soon to be everywhere.

Maybe they are? Whose business is it?

North American Public Transit still sucks

In Toronto, the "transit wars" are ongoing.
Once upon a time ago, the Toronto Transit Commission (TTC), was the envy of North America, clean, efficient, and accident free by comparison with American cities. That was back in the 1970's, American cities were rotting, from racial strife, urban flight, and other things. The rot had not yet reached Canada. That kind of rot still has not affected Canadian cities, the rot in Canada, is caused by other things, almost all of them to do with government at some level.

Most urban dwellers in Canada see public transit as strictly a government responsibility. Of course it should not be so, I have written about this before, for example here. The issue of public transit has become wrapped up in environmental issues like, urban sprawl, greenhouse gas emissions etc. Both politicians and the voters they pander to, believe that there are too many cars, or rather too many people using cars. So they go out of there way to make it more and more difficult to use cars and therefore encourage the use of public transit. Unfortunately most people, myself included, would rather avoid the deteriorating transit system. I have no need to be treated like a herd animal in a subway car, thats a common view. If transit were better, I and others might change that view, but for now the car is my preferred choice.

Add all that together in Toronto, and the result is a city with one of the worst commute times in the world. A recently elected Mayor in Toronto believes that the answer is subways, lots of them. To put it bluntly this Mayor suffers from tunnel vision. Unfortunately subways are very costly in a time of austerity everywhere, and in Toronto the population densities do not warrant the expense. it's a bad idea all-round, and additional government debt or yet more taxes will not make things better.

So what to do? Here is an American look at the same problem, and something we should think about: