"Selling lead weights to swimmers" Operation Twist

Among other things, the Ontario election has diverted my attention from general world foolishness. A most foolish thing I have not commented on lately, is the US Fed  FOMC "action" to buy long term bonds and sell shorter term bonds, called Operation Twist.
Bonds are debt instruments, and can be thought of this way: when sold in huge amounts,  money is made available, increasing money supply and reducing the cost of the money, interest. When bonds are purchased in huge amounts, supply is reduced, increasing the cost or interest. The length of time to repay a bond is important. Short term bonds would generally cost less, because risk is less, its more likely the bond will be repaid - maybe. Longer term bonds generally cost more because the risk of repayment is greater, because the time is greater.
Operation Twist is designed to keep interest rates lower for longer, thereby "stimulating the economy." Will it work? Here is a quote: "It works in the sense that it is perfectly possible to sell short-dated bonds and buy the long-dated variety and in the process change the make-up of the Fed's bond portfolio. Beyond that, the picture is murkier." And. "The last time the Fed tried something similar was in 1961, when it managed to lower long-term rates by only 0.15 of a percentage point. That is the estimated effect according to some economists. In a 2004 paper, Fed chairman Ben Bernanke downplayed the strategy's significance as a tool for promoting lower long-term rates." 
Sounds like a lot of trouble to lower rates by such a small amount. Mr. Tugwit's bears are back to voice their opinion.

Political Power for Sale - here is the list of buyers

Sadly, another opportunity to change the political reality in Ontario is coming to a close. Tomorrow is Election Day. The jostling for power will be decided "the people will choose and get the government they deserve." The whole cliched charade will come to a crashing end.
Cliched? Of course it is, who says the people will choose, only the politicians say this, and maybe some dimwitted media reporter.
Charade? Again, of course, this election was bought and paid for well before the writ was dropped, we've just been going through the motions for the last month.
Am I being cynical? Not at all, look at this link from where the posted graphic was taken. The National Post printed that graphic in today's paper showing contributions to the three major political parties in Ontario this year, BEFORE the rules changed on Sept 7th, 2011,  when the writ was issued. Spending during an election campaign is strictly regulated, spending before the campaign, not so much, not that it needs to regulated, I'm not advocating that. The Post commentary, describes the big donations, including their source, but no reasons for the donations or any explanation or speculation is offered. That is left entirely to the reader.
So, one is left to speculate exactly why would construction industry donations be the largest of all? The construction industry even favoured the Hudak Conservatives with more money, possibly believing the pre-writ polls that gave the Tories an edge. But they are not stupid, they hedged that bet with almost the same dollar amount to McGuinty's Liberals, and less than a fifth of that to the NDP. Clearly they speculated the NDP had virtually no chance of forming a government. Does the construction industry give this money with no strings? Do you believe in the tooth fairy? My answer, no to both questions, and importantly the largest construction industry donors, the unions and Aecon Group must be expecting some sort of favourable treatment from the next government otherwise why donate.

Of most interest to me, were the top donors, the teacher's unions (I was a conscripted member once). Unions in general tended to favour the Liberals first, then the NDP, and far behind were the PC's. But the teacher's unions have a love affair with the Liberals, and why not? The teacher's had labour peace, for the entire eight year Liberal mandate. McGuinty touts himself as the "Education Premier," his wife is a teacher, and he has grown the Ministry of Education and the teaching payroll by instituting all-day kindergarten in Ontario, whether we need it or not. They love him. How much do they love him? During the entire one month election campaign, ETFO a teacher's union, produced and funded a radio and TV campaign called "Refuse to vote against kids." This was a poorly disguised attempt to tell voters to vote for the Liberals, yet the money spent was not registered as part of the Liberal spending limit. How convenient is that? That's not all, as you can see here.
So, why am I going over this now with just hours left before the polls open? Simple. Neither we Libertarians, nor our disenchanted brethren the Freedom Party (FP), had any hope of winning or even making a dent into Ontario politics this time. FP even has 57 candidates (we only have 51), and they boasted that they have a sufficient number to form a majority government. Right. That would mean the tooth fairy does exist. But neither of us will elect even one candidate or come close, that's my bold prediction. Why? Because this election was bought and paid for by the groups listed in the Post graphic above, and the voters are not sophisticated enough to understand that. Here is a more realistic prediction. Don't forget to vote, anyway, we need the numbers.         

Ontario Libertarian Message 2011

Well, after three different schedule updates, the CBC free time broadcast of my Libertarian message happened rather unexpectedly. I was ready to record the broadcast so that I may post it to my blogs, but as I did that guess what? There I was on TV (at 1:03 am), so I quickly hit the record button but missed the first part of the message. With the magic of some editing, and the little bit I've learned about video making, I present to you the entire message, optimized for audio volume.

The important part of the message is, we need government monopoly less, and competitive choices more. Whether that change comes from a libertarian legislator, or one from another party, is of no consequence. What's important is that governments move toward controlling our lives less and less, and giving people the economic freedom to choose what is best for themselves and their families, more and more.

Why should government be involved in health care?

The question of government involvement in Healthcare for Canadians, is never asked during a political debate or during and election campaign.

It is the "elephant in the room," that no politician wants to acknowledge because doing so will make him/her unelectable. So to be elected, the proper approach to take is to agree, yes health care has some problems, but throwing more money at it while eliminating wasteful practices will fix the problems and everything will be wonderful in the future. But the plain facts in Ontario's current election are, that the health care budget will become the largest component of the budget and health care will not improve because demands on it will only increase from here on in.

What's the solution? Clearly something needs to be done, and this video excerpt points to a new beginning.

CBC FreeTime revised

A few days ago I was complaining that the CBC offer of 2 minutes of free time was to be broadcast when most people are asleep. I guess they heard me, or not.
The time for the TV broadcast has changed, now everyone but the most hardened insomniacs will be sleeping for sure.
If you look at the schedule attached, highlighted in green, you will see Libertarian below 26:57:30. What time is that? Well, the explanation is here: "Television programming operates on a 36-hour clock. Therefore, 26:57:30 is 02:57:30 in the morning. I need to keep the schedule like this as it is used by programming and the times need to match, all of this is very specific (as you can see it is timed to the second)." 
So if you happen to be up a few minutes before 3 am tonight, you'll see it. Yawn.......

Education in Ontario - Moving to end the monopoly

Global Warming and watermelons - James Delingpole & Reason TV

Green on the outside, Red on the inside

James Delingpole is a British author and blogger who helped expose the Climategate scandal back in 2009.

Delingpole's new book is Watermelons: The Green Movement's True Colours. He claims climate change is an ideological battle, not a scientific one. The true purpose of the Green Movement is not to save the planet, but to rule it. I couldn't agree more.

Election Day Minus -14, CBC magnanimous with Free-time, but......

Never look a gift horse in the mouth. Good advice if you ever need help from someone offering it. So when the CBC offered 2 minutes of free-time to broadcast the Libertarian message, we jumped and accepted the offer. CBC is not required to give free time, but they felt its part of their mandate. They want to"support the democratic process". I guess that's admirable? In our position, here is 2 minutes on the Ontario-wide network, and we have 51 candidates scattered around the province. Could we afford to say no? Of course not.

There is the issue that the CBC is a publicly funded broadcaster, but as taxpayers, we are coerced into paying for this service too, why not make the best of it. So, a quick poll of the executive, and I was chosen to do this.

It's surprisingly difficult to get a clear message across given 2 minutes on television. I have a learned great deal respect for advertisers, hucksters, etc. Anyone that can sell an idea in 2 minutes deserves whatever they are paid. But I crafted a message with the help of my daughter, a former CBC journalist. So, here is 2 minutes that should make sense. 

Take a moment and imagine getting notification that you, and every member of your family, owed $21,000.
That’s 84,000 for a family of four.
That is the debt the Government of Ontario will have accumulated on your behalf by the end of this fiscal year.
That debt has doubled since Dalton McGuinty took office just 8 years ago… because spending has doubled.

So. Is the government twice as effective? Is health care better? Has education improved? Has traffic improved? Where did all this money go?

Everyone understands that competition improves prices and service… whereas monopolies result in higher costs and lower quality.
Only governments allow monopolies. Take these examples.
Consider why your electricity bill has gone up. No competition.
Consider the high cost of liquor, beer, and wine. No competition.
How about the long wait times for health care? No competition.
Libertarians would allow for real competition in all these areas – and others:
Producing electricity that would lower your hydro bill.
Removing the government monopoly on the sale of liquor, beer, and wine.
Allowing for a competitive health care system, resulting in better and faster care.
Libertarians understand that competition leads to less government spending… which will ultimately reduce the debt. And as we watch the news unfold, day-by-day… we’ve all seen just how devastating debt can be.
Make a historic choice - choose Libertarian.
I’m Allen Small the Libertarian candidate for Markham-Unionville.
To find out more, go to Libertarian dot O-N dot C-A.This message was authorized by the CFO for the Ontario Libertarian Party.

I went down to CBC HQ, the other day to record that, and it went very well I think. The only problem is, will you or anyone get to see it? You see, this will be broadcast at 1 a.m. on the night of Thursday Sept. 29th. In fact the times for other parties are also similarly very late on other nights. The PC's decided to forfeit their time, why bother going to the trouble, if no one will be watching? The audio portion of my appearance will be broadcast on CBC Radio on Sat. Sept. 25th between 7 and 8 a.m., better, I guess.
I hope to stay awake and record it, so may some night owl Libertarians, but of course that will be preaching to the converted. Oh well.

Killer Apps - and the decline of the west?

Imagine Niall Ferguson doing an impression of countryman Sean Connery. Well, watch the TED video below and you will see that and so much more. Ferguson presents the 6 killer apps that allowed the West to diverge from the rest. They are:
1. Competition
2. The Scientific Revolution
3. Property Rights
4. Modern Medicine
5. The Consumer Society
6. The Work Ethic
Ferguson thinks the Great Divergence is over, but does that mean the decline of the West?
The video is 20 minutes, but really worth your time.
Thanks to Matt Bufton.

The myth of job creation

This morning I saw a clever cartoon in the National Post by Gary Clement, so I re-engineered his idea to what you see on the left, and I got to recycle my "change-a-head" graphic. I'm not much of an artist, but I saw Clement's idea and realized it could apply to the Ontario election, in fact any election in the so-called free world.

Politicians love to take credit for job creation, and Dalton McGuinty is as guilty as any of them. And the media are so stupid that they actually reinforce the politicians' position. The truth of course is that the politicians are most interested in their own jobs, but lets be generous for a moment.

Also in today's Post is an article about Dalton McGuinty's visit to a solar panel plant. The plant is idle because of insufficient demand, and the article goes:

"Still, the news that one of the province’s leading solar panel companies has ceased production will come as an embarrassment to Mr. McGuinty, who has been positioning the move into renewable power as a game-changer for Ontario. “Our bold plan is to position Ontario to become North American’s biggest manufacturer of clean technologies,” he said when he visited Eclipsall Tuesday. He routinely compares the Liberal feed-in-tariff, which offers generous rates for solar energy, to the auto-pact that helped build Ontario’s auto industry.
The Liberal government’s efforts have created jobs – though the 20,000 number touted by Mr. McGuinty seems highly questionable, far less the 50,000 he says will be created by the end of next year. In addition, they are hardly high wage, high skilled jobs the Premier claims (Eclipsall pays 20% over minimum wage to its workers, who assemble glass and solar cells imported from Asia, thereby qualifying for the Liberal Green Energy Act’s 60% domestic content rule)."

I've bolded the oft repeated lie that even good reporters like John Ivison should avoid, because it is a lie. The "created jobs" occurred because the Liberals decided to support the solar panel industry at the expense of a multitude of other choices that the money might have been used for. Paying down the debt would have been a good idea. 

I predict that the entire effort to nurture green jobs, in Ontario and elsewhere, will end in failure until the market actually chooses to support these industries for reasons other than government preference. I have this support from Jon Stewart's Daily Show. Apparently a major US manufacturer of solar panels: Solyndra, received $535 million in loans from the Obama government and is now bankrupt. Oops.

Misplaced investments are what governments are really good at doing. Picking winners and therefore losers is their game. Have a listen to Stefan Molyneux on Russian Television of all things:

    

Cutting the government umbilical-cord.

Remember the movie Failure to Launch ostensibly about the grown-up "child" that was reluctant to leave the nest? Today in Freedom Forum, David Krayden writes that the CBC is "the proverbial child who refuses to leave the security of mom and dad’s house, the CBC has shown a definite reluctance to move from state sponsorship to the real world." I couldn't agree more.

Worse than sucking from the government teat to the tune of $1.1 Billion annually, is the constant assault by the CBC mother corp on anything resembling individual liberty and responsibility. And why not?  The CBC wants nothing to do with competition, which is inextricably linked to liberty. Somehow it is the collective responsibility of Canadians to "contribute" to the CBC so it can be the glue that holds this country together. Never mind that all the private broadcasters and their employees have their own incomes taxed to pay for the CBC competition as bizarre as that is. But CBC (and most of the other broadcasters) nurture ideas like continued government funding for the arts, the doom and gloom predictions of global warming, and anything else that pushes the envelope of collectivism in Canadian political thought and society. And you are paying for this!
Have a look at David Krayden's column, and while you are at it, check out Peter Jaworski's view on Government Grants to the Arts where the CBC is mentioned but not in a good way.    

How to destroy an economy, explained in 3 minutes.

The video below is care of my contact at CATO, Dan Mitchell. So, it is specifically directed to the American situation, but it carries a universal message with regard to the action of a government that has unbridled powers.

"On a quick path to ­bankruptcy"

Last year he was dead last at 29.7 out of 100. Deficit Dalton has improved to Ninth spot this year, losing only to Robert Ghiz's PEI for worst performing Premier. This was published in an annual study: Measuring the Fiscal Performance of Canada's Premiers, 2011. That's encouraging but still a major drag on the Canadian economy because of Ontario's size.

A column in todays Financial Post by some of the authors of the study claims that: "during McGuinty’s tenure, program spending has grown 7.1% annually — more than twice the average rate of economic growth (3.2%). If an Ontarian family managed its budget the same way — that is, by increasing spending at double the rate of income growth — it would be on a quick path to ­bankruptcy."

The column continues: "in power, the McGuinty government has accumulated $41-billion in deficits with plenty more to come over the next six years ($68-billion)..........(Premier) McGuinty (is) quick to blame the economic downturn for (the) deficits, the reality is (the) current fiscal woes are primarily the result of excessive spending well before the recession." So will McGuinty change his ways if re-elected? You can bet he will be forced to by our increasingly precarious fiscal position.

Lies my Premier tells me....

Sick of the Liberal ads yet in this oppressively short election campaign? I am. Especially the ones where Doubtless Dalton stands alone spouting....well, untruths. OK, they're lies.

Lie #1. Ontario has North America's First Full Day kindergarten. Not quiet, this article from the New York Times in Sept 1996 shows it's not really a new idea nor is Ontario the first jurisdiction to try it. It's also not really a good idea, check this and this.

Lie #2. If you watch the entire 30 second YouTube video, each statement is "supported" by "footnotes" in the lower right hand corner. Most of the "support" is from the Ontario Ministry of Education about the good job it's doing as the department responsible for education. Hmmm, kind-of-like self appraisal, giving oneself high marks for doing a good job. I would always give myself high marks, especially if I wanted to keep my job. Good support, eh? Another of the supportive footnotes is from McKinsey & Co. an independent word-wide consulting firm. This company had as one of its Canadian consultants one Jim Coutts. Who is Jim Coutts? He was a Secretary to Lester Pearson and Pierre Trudeau, both well known Liberals, you remember. Is it possible that the Canadian arm of McKinsey & Co. that ranked Ontario schools among the best in the world has anything to do with the Liberal Party of Ontario? Like maybe some of the staff are Liberals? No! I'm sure that's not possible.....

Transit Solutions in the GTA - Election Day minus 24

During the course of the Ontario election campaign, I will attempt to post alternative solutions to issues that are important to the campaign. So, below is a posting from Gene Balfour, Libertarian candidate in Thornhill Riding just north of Toronto. The topic is transit, does the government have the only solution, indeed, should the government be involved?

The GTA has recently been declared as the area with the longest commute to work in Canada and it is a top concern for residents, including those in the Thornhill riding .

I have first hand experience with commuting issues and can relate to the concerns of my fellow commuters.

I have lived in Thornhill this past 20 years and in North York the previous 25 years. Since 1978, I have been a regular TTC subway rider. While public transit has been “the better way” for me than commuting by car, I have also run to work, rode my motorcycle to work, taken the bus, and I occasionally drove my car to the office.

Today, people have many options for commuting. These include: walking, running, cycling, using a scooter or motorcycle, car and car-pooling using public roads as well as toll roads (407ETR), bus, street car, subway, commuter train.

What does this tell you? It tells me that people will use the commuting option that best suits their needs and circumstances at any given point in time, and that the commuting issue will be resolved by there becoming available as many viable options as possible - 'viable' being the key word.

There will never be one "silver bullet" that government will find that will satisfy all commuters. Gridlock and long commutes have been top citizen issues for as long as I can remember - if our governments were able to provide the answers, then our commuting issues would have long ago been solved.

It is time for a new approach - one that involves the dismantling of the government monopoly in transportation services that exists today, and opening the flood gates to profit-motivated private sector ideas and solutions.

In simple terms, I would approach this transportation strategy in two ways:

Step 1: Identify the government-imposed deterrents to private sector investment in transportation services, and remove them to create a vibrant and competitive "commuting services sector" in the GTA . This must include the elimination of the many unnecessary transportation regulations that discourage and curtail the creative thinking and capital investments that are needed to address our complex and chronic transportation issues.

Step 2: Notify and engage the business enterprises who possess the know-how and resources to address our transportation issues, and proclaim boldly the Ontario GTA area is enthusiastically seeking businesses who can finally "put to bed" our commuting complaints. It will be very important that allow competition in this new "commuting services sector" to follow its natural course without government meddling so that the forces of competitive options and pricing will keep the costs low. In addition, unionized labour should not be allowed to operate in this sector so as to maintain competitive pricing and service levels.

Free-enterprise entrepreneurial businesses will always trump government monopolies in pricing, service, convenience and quality. Since the industrial revolution, almost all of our most significant technological achievements have come from entrepreneurs whose profit motive has driven them to seek and keep happy customers. Government has had its chance – now its time to let capitalism come to the rescue.

To compliment Gene's message above, I have appended an excellent related video brought to my attention by Andrew Phillips from the Ottawa area. Randal O'Toole, a Senior Fellow at CATO discusses the privatization of transit in US cities. Well worth your time.