Capitalism is required to pay for a communist government

"All governments are communist....... What I mean is that all governments expect to be recompensed, not according to the value of their contributions to society, but according to their needs." That's George Jonas in an op-ed piece in today's National Post called The McGuinty paradox. Mr. Jonas goes on to explain: "Wealth that hasn't been created cannot be redistributed, no matter how much a government needs it."  

Of course like all Western governments, in order to stay in power for as long as possible, they buy your votes, they spend "future wealth," wealth that has yet to be created. They assume, things will go merrily on as before, and their over spending will somehow have no effect on the wealth creators.  

As Mr. Jonas points out, the McGuinty Liberals in Ontario are a quarter-trillion dollars in the hole. How can that continue without consequences? Will they be held to account? Most importantly, how did we let that happen and can we prevent it from happening again?

Mr. Jonas doesn't say it, but the implication is there, its time to change the way we do government. Government should be there to protect citizens, not to protect the jobs of politicians.

Canada's bloated health care monopoly

"When countries with smaller workforces accomplish what those with larger ones struggle to achieve, we need to know the reasons," says Matthew Lister in a National Post article Health care needs to get lean. Mr. Lister was comparing the ratio of healthcare administration employees (federal and provincial) in Canada to that in Germany. It turns out that the Germans are remarkably more efficient. One healthcare administrative employee services about 1,415 Canadians. In Germany, with a similar system organized in states (provinces in Canada), it takes one healthcare administrative employee to service 15,545 Germans, more than ten times the Canadian ratio! Furthermore Mr. Lister compared Berlin's State healthcare employees to Alberta's, both have about the same population. Berlin's State has 104 employees compared to Alberta's Ministry of Health with 708 people. Yes, Alberta is huge in comparison to the German State, but it's the populations that are similar and that use the healthcare - not even close.

The chart above is from a comparison of healthcare outcomes for seven OECD countries. Canada is 6th, and Germany is 4th, but Canada is dead last in quality care, effective care and timeliness of care, while spending more money per capita.

Canadians most frequently compare our healthcare system to that of the US. According to the chart, they are similar, but only in outcomes. Canada is 6th, the US is 7th, but look at the difference in per capita cost. According to that chart, US costs are almost double Canada's per capita cost. Based on that, Canada should properly be compared to the other countries because the systems are more similar and so are the costs.

An article by Tom Blackwell in the Post, Look past U.S. for health-care fixes: study, agrees that the US is not a good comparison for us. The other countries have similar systems to Canada's, but with much better outcomes and similar or lower costs. Why?

The answer seems to be related to competition and choice in these other countries, ideas that even last week were squelched by the McGuinty Liberals in Ontario. These countries haved shifted into "a 'consumer-driven' culture that gives patients more choice in medical services." Patients are allowed to pick and choose the services they get through private health insurance companies.

One of the doctors involved in the study said: "What I felt was quite striking across a number of these other countries is the role of consumer choice. As soon as consumers start to select and choose ... then you introduce into those systems some element of competition. Then the providers for those services suddenly need to respond to consumer demand, or lack thereof."

Of course this would be a start, a move in the right direction toward a truly competitive healthcare system. But can it really happen? An article in the Post by Lorne Gunter: We're all addicted to big government, suggests just how difficult this might be.

Mr. Gunter examines a StatsCan report that says:"Fully one-in-five Canadians (20.2%) now work for one level of government or another, for a Crown corporation or for a publicly funded institution such as a school or hospital. That’s more than 3.6 million out of a total of about 18 million working Canadians." Add to that families, and extended families, and people that depend on government largess (from taxpayers), and you start to see how many votes are cast in favour of big government. It's a bit depressing. "We’ve all got our ladles in the pot, which is why it is so difficult to find a constituency for broad cuts to government and significant tax reduction," says Mr. Gunter.

      

More Penn Jillette - Why Libertarianism?

Laissez-faire capitalism — is the ideal economic system

Are you still operating under the delusion that the Occupy Movement is more than just an attempt by the self-identified, downtrodden 99% to redistribute the wealth of the 1%?

As I have suggested before, something is wrong, but the "fix" is so complicated, so knotted-up and entangled with crony capitalism and government regulation, that one needs to be a professor of economics to provide even a smidgeon of clarity. Reprinted below (with permission) is an attempt at providing clarity written by George Reisman, Ph.D., and Professor Emeritus of Economics at Pepperdine University. The article is long because the topic is complex, but well worth the effort of reading. A lively discussion with several opposing views appears here.

How a Highly Productive and Provident One Percent Provides the Standard of Living of a Largely Ignorant and Ungrateful Ninety-Nine Percent

The protesters in the Occupy Wall Street Movement and its numerous clones elsewhere in the country and around the world chant that one percent of the population owns all the wealth and lives at the expense of the remaining ninety-nine percent. The obvious solution that they imply is for the ninety-nine percent to seize the wealth of the one percent and use it for their benefit rather than allowing it to continue to be used for the benefit of the one percent, who are allegedly undeserving greedy capitalist exploiters. In other words, the implicit program of the protesters is that of socialism and the redistribution of wealth.

Putting aside the hyperbole in the movement’s claim, it is true that a relatively small minority of people does own the far greater part of the wealth of the country. The figures “one percent” and “ninety-nine” percent, however exaggerated, serve to place that fact in the strongest possible light.

What the protesters do not realize is that the wealth of the one percent provides the standard of living of the ninety-nine percent.

The protesters have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.

In such a world, if one sees a farmer’s field, or his barn, or plow, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people’s means of production except by inheriting them or by seizing them.

In the world of the protesters, means of production have the same essential status as consumers’ goods, which as a rule are of benefit only to their owners. It is because of this that those who share the mentality of the protesters typically depict capitalists as fat men, whose plates are heaped high with food, while the masses of wage earners must live near starvation. According to this mentality, the redistribution of wealth is a matter merely of taking from the overflowing plates of the capitalists and giving to the starving workers.

Contrary to such beliefs, in the modern world in which we actually live, the wealth of the capitalists is simply not in the form of consumers’ goods to any great extent. Not only is it overwhelmingly in the form of means of production but those means of production are employed in the production of goods and services that are sold in the market. Totally unlike the conditions of self-sufficient farm families, the physical beneficiaries of the capitalists’ means of production are all the members of the general consuming public who buy the capitalists’ products.

For example, without owning so much as a single share of stock in General Motors or Exxon Mobil, everyone in a capitalist economy who buys the products of these firms benefits from their means of production: the buyer of a GM automobile benefits from the GM factory that produced that automobile; the buyer of Exxon’s gasoline benefits from its oil wells, pipelines, and tanker trucks. Furthermore, everyone benefits from their means of production who buys the products of the customers of GM or Exxon, insofar as their means of production indirectly contribute to the products of their customers. For example, the patrons of grocery stores whose goods are delivered in trucks made by GM or fueled by diesel oil produced in Exxon’s refineries are beneficiaries of the existence of GM’s truck factories and Exxon’s refineries. Even everyone who buys the products of the competitors of GM and Exxon, or of the customers of those competitors, benefits from the existence of GM’s and Exxon’s means of production. This is because GM’s and Exxon’s means of production result in a more abundant and thus lower-priced supply of the kind of goods the competitors sell.

In other words, all of us, one hundred percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate. As just indicated, the oil fields and pipelines of the hated Exxon corporation provide the fuel that powers the tractors and trucks that are essential to the production and delivery of the food the protesters eat. The protesters and all other haters of capitalists hate the foundations of their own existence.

The benefit of the capitalists’ means of production to non-owners of means of production extends not only to the buyers of the products of those means of production but also to the sellers of the labor that is employed to work with those means of production. The wealth of the capitalists, in other words, is the source both of the supply of products that non-owners of the means of production buy and of the demand for the labor that non-owners of the means of production sell. It follows that the larger the number and greater the wealth of the capitalists, the greater is both the supply of products and the demand for labor, and thus the lower are prices and the higher are wages, i.e., the higher is the standard of living of everyone. Nothing is more to the self-interest of the average person than to live in a society that is filled with multi-billionaire capitalists and their corporations, all busy using their vast wealth to produce the products he buys and to compete for the labor he sells.

Nevertheless, the world the protesters yearn for is a world from which the billionaire capitalists and their corporations have been banished, replaced by small, poor producers, who would not be significantly richer than they themselves are, which is to say, impoverished. They expect that in a world of such producers, producers who lack the capital required to produce very much of anything, let alone carry on the mass production of the technologically advanced products of modern capitalism, they will somehow be economically better off than they are now. Obviously, the protesters could not be more deluded.

In addition to not realizing that the wealth of the so-called one percent is the foundation of the standard of living of the so-called ninety-nine percent, what the protesters also do not realize is that the “greed” of those who seek to become part of the one percent, or to enlarge their position within it, is what serves progressively to improve the standard of living of the ninety-nine percent.

Of course, this does not apply to wealth which has been acquired by such means as obtaining government subsidies or preventing competition through protective tariffs and other forms of government intervention. These are methods which are made possible to the extent that the government is permitted to depart from a policy of strict laissez-faire and thereby arbitrarily reward or punish firms.

Apart from such aberrations, the way that business fortunes are accumulated is by means of the high profits generated by the introduction of new and improved products and more efficient, lower-cost methods of production, followed by the heavy saving and reinvestment of those high profits.

For example, the $6 billion fortune of the late Steve Jobs was built on a foundation of Mr. Jobs having made it possible for Apple Computer to introduce such new and improved products as the iPod, the iPhone, and the iPad, and then heavily saving and reinvesting the share of the profits that came to him.

Two closely related points need to be stressed. First, the fortunes that are accumulated in this way generally serve in the larger-scale production of the very sort of products that provided the profits out of which their accumulation took place. Thus, for example, Jobs’ billions serve largely in the production of Apple’s products. Similarly, old Henry Ford’s great personal fortune, earned on the foundation of introducing major improvements in the efficiency of automobile production, which brought down the price of a new automobile from about $10,000 at the beginning of the 20th Century to $300 in the mid 1920s, was used to make possible the production of millions of Ford automobiles.

Second, the high rates of profit earned on new and improved products and methods of production are temporary. As soon as the production of the new product or use of the new method of production becomes the norm in an industry, it no longer provides any exceptional profitability. Indeed, further improvements again and again render earlier improvements downright unprofitable. For example, the first generation of the iPhone, which was highly profitable just a few years ago, is or soon will be unprofitable, because further advances have rendered it obsolete.

As a result, the accumulation of great business fortunes generally requires the introduction of a series of improvements in products or methods of production. This is what is required to maintain a high rate of profit in the face of competition. For example, Intel’s ability to maintain its high rate of profit over the years has depended on its ability to introduce one substantial improvement in its computer chips after another. The net effect has been that computer users have gotten the benefit of improvement after improvement not only at no rise but a drastic decline in the prices of computer chips. Insofar as high profits rest on low costs of production, competition drives prices down to correspond to the lower level of costs, which necessitates the achievement of still further cost reductions to maintain high profits.

The same outcome, of course, applies not only to Intel and microprocessors but also to the rest of the computer industry, where gigabytes of memory and terabytes of hard drive data storage now sell at prices below the prices of megabytes of memory and hard drive data storage just a couple of decades ago. Indeed, if one knows how to look, the principle of ever more and better products for less and less applies throughout the economic system. It is present in the production of food, clothing, and shelter as well as in the high tech industries, and in virtually all industries in between.

It is present in these industries even though the government’s inflation of the money supply has caused the prices of their products to rise sharply over the years. Despite this, when calculated in terms of the amount of labor the average person must expend in order to earn the wages needed to enable him to buy these products, their prices have sharply fallen.

This can be seen in the fact that today, the average worker works 40 hours per week, while a worker of a century or so ago worked 60 hours a week. For the 40 hours he works, the average worker of today receives the goods and services comprising the average standard of living of 2011, which includes such things as an automobile, refrigerator, air conditioner, central heating, more and better living space, more and better food and clothing, modern medicine and dentistry, motion pictures, a computer, cell phone, television set, washer/dryer, microwave oven, and so on. The average worker of 1911 either did not have these things at all or had much less of them and of poorer quality.

If we describe the goods and services received by the average worker of today for his 40 hours of labor as being 10 times as great as those received by the average worker of 1911 for his 60 hours of labor, then it follows that expressed in terms of the amount of labor that needs to be performed today in order to be able to buy goods and services equivalent to the standard of living of 1911, prices have fallen to two-thirds of one-tenth of their level in 1911, i.e., to one-fifteenth of their level in 1911, which is to say, by 93 1/3 percent.

Capitalism—laissez-faire capitalism—is the ideal economic system. It is the embodiment of individual freedom and the pursuit of material self-interest. Its result is the progressive rise in the material well-being of all, manifested in lengthening life spans and ever improving standards of living.

The economic stagnation and decline, the problems of mass unemployment and growing poverty experienced in the United States in recent years, are the result of violations of individual freedom and the pursuit of material self-interest. The government has enmeshed the economic system in a growing web of paralyzing rules and regulations that prohibit the production of goods and services that people want, while compelling the production of goods and services they don’t want, and making the production of virtually everything more and more expensive than it needs to be. For example, prohibitions on the production of atomic power, oil, coal, and natural gas, make the cost of energy higher and in the face of less energy available for use in production, require the performance of more human labor to produce any given quantity of goods. This results in fewer goods being available to remunerate the performance of any given quantity of labor.

Uncontrolled government spending and its accompanying budget deficits and borrowing, along with the income, estate, and capital gains taxes, all levied on funds that otherwise would have been heavily saved and invested, drain capital from the economic system. They thus serve to prevent the increase in both the supply of goods and the demand for labor that more capital in the hands of business would have made possible. They have now gone far enough to have begun actually to reduce the supply of capital in the economic system in comparison with the past.

Capital accumulation is also impaired and can ultimately be turned into capital decumulation, through the effects of additional government regulation in raising the costs of production and thus reducing its efficiency. This applies to practically all of the regulations imposed by the Environmental Protection Agency, the Occupational Safety and Health Administration, the Consumer Product Safety Commission, the National Labor Relations Board, the Food and Drug Administration, and the various other government agencies. The effect of their regulations is that for any given amount of labor performed in the economic system, there is less product than would otherwise be produced.

Now anything that serves to reduce the ability to produce in general, serves also to reduce the ability to produce capital goods in particular. Because of such government interference, any given amount of labor and capital goods devoted to the production of capital goods results in a smaller output of capital goods, just as any given quantity of labor and capital goods devoted to the production of consumers’ goods results in a smaller output of consumers’ goods. At a minimum, the reduced supply of capital goods produced serves to reduce the rate of economic progress. A reduction in the supply of capital goods produced great enough to prevent the addition of any increment to the previously existing supply of capital goods, and thus to put an end to capital accumulation, brings economic progress to a complete halt. A still greater reduction, one that renders the supply of capital goods produced less than the supply being used up in production, constitutes capital decumulation and thus a decline in the economic system’s ability to produce. As indicated, the United States already appears to be at this point.

The problem of capital decumulation has been greatly compounded as the result of massive credit expansion induced by the Federal Reserve System and its policy of easy money and artificially low interest rates. This policy led first to a great stock market bubble and then a vast housing bubble, as large quantities of newly created money poured into the stock market and later the housing market. Between these two bubbles, trillions of dollars of capital were lost. In both instances, vast overconsumption occurred as people raced to buy such things as new automobiles, major appliances, vacations, and all kinds of luxury goods that they would not have believed they could afford in the absence of the effects of credit expansion, often incurring substantial debt in the process.

In the one case, it was the artificial rise in stock prices that misled people into believing that they could afford these things. In the other, it was the artificial rise in home prices that produced this result. The seeming wealth vanished with the fall in stock prices and then again, later, with the fall in housing prices. In the housing bubble, moreover, millions of homes were constructed for people who could not afford to pay for them. All of this represented a huge loss of capital and thus of the ability of business to produce and to employ labor. It is this loss of capital that is responsible for our present problem of mass unemployment.

Despite this loss of capital, unemployment could be eliminated. But given the loss of capital, what would be required to accomplish this is a fall in wage rates. This fall, however, is made virtually illegal as the result of the existence of minimum-wage laws and pro-union legislation. These laws prevent employers from offering the lower wage rates at which the unemployed would be reemployed.

Thus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe. It is their mentality, the Marxism that permeates it, and the government policies that are the result, that are responsible for what they complain about. The protesters are, in effect, in the position of being unwitting flagellants. They are beating themselves left and right and as balm for their wounds they demand more whips and chains. They do not see this, because they have not learned to make the connection that in violating the freedom of businessmen and capitalists and seizing and consuming their wealth, i.e., using weapons of pain and suffering against this small hated group, they are destroying the basis of their own well being.

However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better, if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well being, including their own.

Copyright © 2011 by George Reisman. Permission is hereby given to reproduce this article via electronic transmission, including republication on other websites.
George Reisman, Ph.D. is Pepperdine University Professor Emeritus of Economics, a Senior Fellow at the Goldwater Institute, and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996). His website is http://www.capitalism.net/ and his blog is georgereismansblog.blogspot.com.

Fiscal Crunch for ON

See the dark clouds gathering?
Earlier this week I critiqued the Throne Speech the Ontario Government cobbled together to make things sound positive for the coming session of the Provincial Legislature. Yesterday the Provincial Minister of Finance had a more sober take on the new Liberal spending season ahead. He said: "As all Ontarians know, continuing to borrow without curbing spending is simply not sustainable." Someone must have whispered in his ear that a German Bond auction (6 Bn Euros) FAILED earlier in the day. Of course the Liberals have been the ones that are spending with borrowed money as if it's going out of style. The Euro, could be going out of style, and its that risk that the Ontario Liberals will no doubt blame for the province's woes when they are compelled to present a budget in the new year. It is fiscal crunch time.
Terence Corcoran (National Post) compares Ontario's looming problems with the Eurozone crisis, in this column today.    

Death Panels and breast cancer

The Canadian Task Force on Preventative Health Care recommends that women aged 40 to 49 NEED NOT bother getting a routine mammogram. For women aged 50 to 74 they recommend routine screening with mammography every 2 to 3 years.
The Task Force study relied on data from mammograms, some of it 30 years old. Things have changed in 30 years. The pictures (left) show mammograms of the same normal breast, taken two different ways using modern digital (left-sde) and 20 to 30 year old film-based (right-side) mammography. You don't need to be an expert to see that the modern digital picture provides a much clearer image where an expert is more likely to find a suspicious area. Much of the Task force data is based older, less accurate, film-based technology. Don't believe me? Listen to Dr. Martin J. Yaffe interviewed on CBC Radio's The Current here. Click the "Listen Pop-up" where Dr. Yaffe can be heard from 2:12 to 12:39. He is fairly adamant that this recommendation by the Task Force is flawed, and he does not shirk from the question that this may be related to cost considerations rather than the best interests of women.
An article (The Department of Health and Human Services' Death Panel) in an American publication, Forbes Magazine, says it best for the United States:
"If the government succeeds in dominating health care, as it’s now on its way to doing, we can expect more of these weird and lethal findings. The focus will be on rationing and saving money. What we need in health care is more free enterprise, not Soviet-style controls."
Of course here in Canada, and Ontario in particular, the government already dominates the health care system, and rationing and triage are the way things are done. So imagine having a discussion with a physician that has read and accepted this Task Force report, which, as Dr. Yaffe suggests is flawed. The physician will reassure her 40 to 49 year old female patients, that there is nothing to be concerned about, and of course the patients may accept that assurance.
There is an element of coercion here on the part of the physician. Implicit to the physician's advice is the incentive to ration care and save costs which may be a motivation of the Task Force. Rather, the incentive should to offer patients the best choices available so they may act in their own best interests. Choice is imperative.
The simple question I have, is why is it illegal in Ontario to have a supplementary private health care system that patients may use, or not, to allay their particular health concerns? Why not give people the choice?
         

Speech from the Throne 11/22/11

Doesn't that sound highfalutin? Well, in a Westminster style Democracy, like Canada's, it's not. It is what routinely happens at the start of every new sitting of Parliament, Federally or Provincially. Today it was Ontario's turn, the 40th Session of Parliament, and the speech was delivered by the Queen's Representative (hence Throne) here in Ontario, the Lieutenant Governor.
The speech itself is written by the governing party, in this instance the McGuinty Liberals. They probably consider themselves middle-of-the-road politically. Of course in every Western Democracy, that means statist, that is, the state is the beginning, the end, and the middle of all problems and solutions. That unfortunately is the way they think and so do many of our citizens.
I take my new role as Leader of the Ontario Libertarians, seriously enough to respond to any major Ontario Government announcements, and a Throne speech sets the tone and the goals of the new Parliament, so, it is important.
Below is a heavily edited version (under 5 minutes) of the speech, written highlights can be seen here. But give a listen, then read my response underneath.

In the Throne speech delivered today, while the McGuinty Liberals are acknowledging the global financial crisis, their actions are woefully inadequate as a means of averting the same fate. As if totally disconnected from the market turmoil in all of the Western democracies, the McGuinty government’s plan pretends that Ontario is immune to such problems. In Europe and in America, governments have grown to the point where they are outspending the productive abilities of their own citizenry. The excessive deficits and accumulating debts are now jeopardizing the credit ratings of these countries while impacting the wealth and well being of their citizens.

Unfortunately for Ontario, it is following in the same path. Since McGuinty has taken power in 2003, Ontario's government has grown much faster than its economy. Government spending has doubled and so has the provincial debt, resulting in Ontario becoming a “have not” province. Those facts are intimately linked - cause and effect.

In a recent speech, Dalton McGuinty suggested that Ontario would weather the economic storm with a strong stable plan; this was repeated in the speech from the Throne today. It’s as if the government now realizes that the provincial payroll has ballooned out of their control, so they now intend to reduce the Ontario public service by five per cent by March 2012, and a further two per cent by 2014. Add to that another $200-million in workforce reductions at the 630 government agencies, and they claim this will be sufficient to attack the massive $250-billion debt. That is pathetic, and does not even begin to address the problem.

Despite the newfound appreciation for budget restraint, the government is forging ahead with the expensive and unnecessary introduction of full day kindergarten and a reduction of college and university tuition by 30 per cent for families earning less than $160,000 per year. This amounts to a subsidy and job security for the teacher’s unions. Supporting the education sector is moreover highly questionable, given the teacher’s union’s active support during this past election campaign.

In the Speech from the Throne, the government insists that it will find improved efficiencies to encourage greater productivity without ever explaining how this can be done. In fact, the government undermines any possibility of this happening by treating the government monopolies of Healthcare and Education as sacrosanct, and never to be touched by the evil practices of competition, so widely and profitably used in every other sector of our economy.

No, the McGuinty Liberals have co-opted the wealth of hard working families and transferred it to government because think they know better how to spend the money of those families. Certainly, those families may prefer to make their own decisions about how best to spend their wealth if they had a choice.


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Atlas Shrugged Part One: a review....

"The film is magnificent," according to Stefan Molyneux as seen in his latest blog post here. I can't think of a better endorsement, so I bought it. I bought in good faith with the hope that this production group finishes the three parts.

The DVD is available at Amazon.ca or here.

Here is Stefan's review:

Getting to the real source of the problem...

Civic officials are attempting to close down "Occupy" movement sites in cities all over North America. In Canada and northern US cities, winter is closing in. The occupiers will be faced with serious challenges from nature AND civic officials very soon.
For me, the problem with the OWS movement is its ambiguity. I can't wholeheartedly support a movement that really has not defined itself. If OWS "leaders" (are there any?) actually came out and said they want the link between crony capitalists and big government broken, well I might listen. If they actually pointed to big government, union-government monopolies, government-business monopolies, and unsustainable entitlement programs as problems, then I might listen. But they don't. Their message is muddled and could be capsulized as "We don't know what we want, and we won't leave until we get it." That was a suggestion on a talk radio show I was listening to, unfortunately it works for this protest.

If the OWS movement is unable to pinpoint the problem or articulate a solution, that does not mean it hasn't been done. In fact it has been done several times over the years, but without much fanfare and none of the drama that roving bands of protestors offer to the media.
The video below is an example, and shows Russell D. Roberts, Professor of Economics at George Mason University and a Senior Fellow at Stanford University's Hoover Institution. In October of 2009, in the midst of the TARP and financial crisis, Roberts gave testimony to a US House Committee on Oversight and Government Reform. The testimony was articulate, pointed and for me and others, hit the nail squarely on the head. The testimony was also promptly ignored.
Professor Roberts has blogs here and here. His testimony is what OWS should be using as its mantra and its reason for being. Instead, OWS organizers brainwash their followers by having them repeat inanities in a way reminiscent of cult behaviour. Superimposing the "Hive mind" over the individual thinker. That sort of collective action makes me suspicious, always.
If you have not heard Prof. Robert's testimony you are in for a treat, if you have, its a treat to hear it again. Its needs to be shared widely.

COP 17 or cop out.

Last August there was news that an old theory had been resurrected to explain global warming. You will remember the story out of CERN, that cosmic rays may have an effect on warming, greater than the dreaded CO2, such was the evidence presented.
That posting, plus others, frequently prompt comments from other bloggers, and readers informing me of my heretical position in view of the scientific consensus. No one is more righteous, or more fervent in their belief, than a religious zealot. So I feel comfortable in comparing AGW belief and religion, and that does not even include the question of evidence in either case.
Of course not all who believe that global warming has occurred, and is occurring, are religious zealots. I agree that warming has and is occurring (I'm not a zealot, just a skeptic), I also agree that CO2 is a greenhouse gas (so are H2O and methane). I just don't believe its an issue we can or should try to control, nor do I think it will ever be a problem, at least not in the Al Gore doom and gloom scenario. As I have stated before, the scientists are gung-ho for AGW research and grants, because they need the money, plain and simple, and governments want the power and control.
In the last few months their have been some interesting developments on the AGW front. The Koch Brothers, rich American libertarians (of all people), funded a study called BEST (Berkeley Earth Surface Temperature), which discovered that the earth has been warming, shocking I know, and the continental glaciers around my house have retreated, too! The warmists are thrilled, because this BEST project, could mean the end of climate change skepticism or as they prefer, denial. I don't think so. In fact there are many questions that remain unanswered and the whole thing has been questioned.
Then there was the case of the delinquent teenager, or rather the new book that compares delinquent teenagers to "climate experts." This book by the Canadian journalist Donna Laframboise, adds gasoline to the firestorm created by "climategate." Imagine having the power to affect multi-billion dollar government programs based on "peer-reviewed" data compiled by activist graduate students. That is part of the claim in Ms. Laframboise' book as explained here.
At the end of November, the IPCC meets again to save the world, this time in Durban South Africa. Will it be another Cancun, I hope?  Will people realize that climate science resembles pseudoscience in its ability to predict doom, or as Matt Ridley eloquently stated: "we may be putting a tourniquet round our necks to stop a nosebleed." Who is Matt Ridley? He is a zoologist who recently delivered a lecture for the Angus Millar Lecture 2011, on Scientific Heresy. The lecture dissects the difference between science and pseudoscience (well worth the read). Ridley provides six lessons which he uses to attack the establishment view on AGW. He concludes: "I’ve spent a lot of time on climate, but it could have been dietary fat, or nature and nurture. My argument is that like religion, science as an institution is and always has been plagued by the temptations of confirmation bias. With alarming ease it morphs into pseudoscience even – perhaps especially – in the hands of elite experts and especially when predicting the future and when there’s lavish funding at stake." I couldn't agree more, as for COP17, we should cop out.

 

The Fatal Conceit

A new website has got me thinking again, about why I do this blog, and why I believe, two apparently very different topics, are so intertwined. The idea that links politics and religion together for me, is called "spontaneous order." One of my fellow bloggers is far more learned than I on the topic, you can find him at Interdisciplinary World down there to the right on my blog list. I've written about this before, and you will see why it comes up again.
Spontaneous order is essentially order that seems to arise out of chaos. Why? Because there are unseen "rules or laws" that create the order. The rules were not made up by anyone, they are just characteristics of the nature of matter and energy, the way the universe works. Humans have discovered a lot of these rules with a tool called science. There are many subdivisions of science now, and we know a lot of the rules.
One of the book covers seen above, is Darwin's Origin of Species. Its in this book that he outlines what he thinks are the rules that govern speciation in nature which he calls natural selection. Natural selection is part of the mechanism of Evolution. Of course Evolution conflicts with a great many religious beliefs which brings me back to the first paragraph, and part of the reason for this blog. Generally I tolerate religious belief because it can be compartmentalized sufficiently so as to not interfere with other people's actions. When it starts to interfere, becoming "pushy" and smothering, I push back. One of the positive results of the new world of "political correctness" that we now inhabit, is that people realize that their particular religion is not necessarily everyone's. So my own children did not sing "yes Jesus loves me" in "public" school, like I once did. Chalk one up for freedom from religion.
Darwin did not know about the genetic reasons for evolution, he did not know about shifting allele frequencies or anything at that level of complexity or below, so he really did not discover the "rules," he inferred the rules. We are still discovering all the rules in biology. The important thing for me, is that the rules are discoverable, not mystical, not under the control of a deity. No deity is required, evolution is spontaneous and orderly.
The other book cover, Hayek's book, is related. If you look up spontaneous order, you will see written that many classical liberals (that's politics folks), like Hayek, believe that markets are governed most efficiently without being governed. The rules that govern markets and human behaviour - the science of economics - work best spontaneously without the tinkering of an intelligent designer.
In evolution, the idea of an intelligent designer is common among religious folk, the undiscoverable, unseen, and unknowable deity, is the designer. In economics, because it is a science peculiar to humans (and no other creatures on Earth), many believe there needs to be a designer, a tinkerer, someone to make it more efficient, because people are smart. Right? Unfortunately this is where the conflict occurs. Economics cannot be compartmentalized, in fact it pervades every aspect of one's life in a civil society. Instead of being left to a deity, economics has become by default the purview of government. My children are not free to interact with others in a spontaneous economic order as they should, they, and all of us are manipulated. We all sing to the tune "the government is here for the common good." The disagreement is whose common good? That is what Hayek's Fatal Conceit is about, people who think they know better.
The video below comes from a new website: Libertarianism. It references spontaneous order, and its delivered by an excellent writer David Boaz. If you need a refresher or a new insight, watch.        

  

  

Untying the knot that strangles economic freedom

SURPRISE! The Federal Conservative Party's pipe-dream promise of cutting Canada's deficit (never mind the debt) by 2014, has just stumbled into objective reality. The financial chaos in the rest of the world is beating at our door.

That (photo) Saturday Night Live skit (Nov. 5, 2011), referencing the Greek financial turmoil, joked that "Dionysus (god of the grape harvest, ritual madness and ecstasy...) has the spending part down cold, but saving … not so much." Time to call in "Klaus, the German god of prudence and austerity."

The cradle of democracy is in trouble. Exposed for all to see, are the unintended consequences of the political entanglements that were created for the common good. It seems manipulating for the common good, is really not so good after all. (go ahead, try and sell that idea)

Prime Minister Harper, is fresh from the latest G20, where noises were made that G20 members should 'kick in some cash' (yes, that's us folks) to help out our Greek friends. 'Hey buddy, can you spare a dime' (or else). Now Finance Minister Flaherty, says that promises made just last June will be altered. Quelle surprise!

The Greek gods have inspired my friend Gene Balfour to cook up a policy proposal for Ontario that suggests practical steps to untie the knot created by big government. Gene suggests that it is excessive regulation that creates and expands the need for public sector jobs, which increases the payroll, which impacts government spending, which affects the deficit, and adds to the debt. Do you remember what happened to the old lady that swallowed a fly? It's a bit like that, but not funny. Here is Gene's proposal.   

Winning!

Sorry to mislead, this post has nothing to do with the actor and party animal Charlie Sheen. However, in March of 2011, Sheen redefined the term "winning" to give it a more ironic twist. The usual meaning: "the act of a person or thing that wins" (without tiger blood etc.), applies here. Sure, money would have been most welcomed as a winning, but, in this case it's a political win, unusual enough for me.
On the weekend, the Ontario Libertarians had a convention where they chose me as the party leader, and I'm grateful for that; but my family, well, some misgivings there.
A political party Convention such as we had, would ordinarily get wide press coverage (there was local coverage). But, we are not a large group, though we are growing. Its pretty clear to me why we are growing, and why more people want the party to have more influence and impact.
We are the only real alternative to the "big government" statist political parties. Their failures at governing (or over-governing), are becoming visible each and every day, to all but the most collectivist minded people.
Just a few months ago, I had no intention of seeking the leadership of this party, it had not even crossed my mind. But as we drew closer to the provincial election on Oct. 6, 2011, I realized that it was possible to reach our stated goal of 60-plus candidates across the province. In fact, 74 people had come forth and completed some level of paperwork toward candidacy by early September. Ultimately, only 51 people jumped through all the hoops, still twice the number we had fielded in the previous election; impressive enough. The missing ingredient may have been leadership, like the inspirational coach that urges the team on to victory, that may be all that was required for the final push to 74.
Canadian libertarian parties have a sad history of invisible leaders. In the last Federal election (May 2, 2011) the Federal Libertarian leader was AWOL, he didn't even run; he disappeared not long after his leadership election. So, just a paltry 23 candidates represented the party in that election. The Ontario leader for the past 15 years was more visible, but not all an activist, so appeared absent. Of course the cloak of invisibility is sewn by the media, but it's the leaders themselves that provide the thread and the fabric.
Don't get me wrong, leadership alone is not sufficient for attention and success. Look at our scions the Freedom Party. Their leader was quiet visible in the media (to me anyway), especially television. He is articulate and presents himself as a reasonable alternative, and they had 56 candidates in the last election, yet received only half of our total vote count. So leadership, while important, isn't sufficient. It was supremely important however, for the NDP Federally in May, with media help and hype. That just tells me the message needs to be agreeable to the media.....too bad.
My political awakening these last three years, has shown me that political parties in Canada are remarkably flimsy things, I don't think most people know that. When I ran as a candidate over the last three years, newspaper reporters would ask me where my campaign headquarters were, and who my manager was. Surprise, surprise, my home and me.
Parties can be in government with a huge majority then literally disappear after and election (Kim Campbell in 1993 lost 167 seats). The Federal Progressive Conservatives are now gone from the scene, though Brian Mulroney had a huge majority once. Politics is a risky business. Sometimes you may need that Adonis DNA to survive.
   

Greek salad days are over....

It has been over a year now since I first wrote about a sovereign debt and currency crisis. The best part of that post, is the YouTube video that is associated with it: Overdose: The Next Financial Crisis. The video goes over the cause of the US mortgage and housing crisis that culminated in the Great Recession, and the aftermath that Americans are still coping with.
Banks and bankers, Wall Street and the corporations were blamed for that financial crisis, and are still being blamed thanks to the recent Occupy Wall Street movements around the world. Of course its true, they deserve blame but it is only part of the truth. The video clearly points to the real culprits as being the US (and other) government's attempts to prevent a severe recession after 9/11 by increasing liquidity, or in English, making it easier to get a loan, buy a house etc.
It worked, it really did get easy to get a loan or mortgage, so easy that people that should not have qualified for loans/mortgages got them anyway. And of course those shaky loans were "packaged" together, and with the help of colluding ratings agencies, the loans were treated as Triple A guaranteed secure investments to obtain an income stream. The packaged loans came to be known as Asset-Backed-Commercial-Paper, and the rest is now history.
But of course the crisis did not get resolved, it just got magnified and compounded as the video suggests, with huge bailouts, socialized bailouts. These corporate bailouts mostly, were so large (like TARP), that the US incurred new huge debt. Many countries already had such high debt and future liability from entitlements, that their solvency was already in jeopardy. Europe seemed to be rife with those countries that have come to be known as PIIGS. Greece is the "G" in PIIGS and it looks like it has real problems.
So here we are. Greece has so much debt, it has trouble meeting its obligations to payoff loans. As a member of the Eurozone, a Greek default would create a Lehman-like collapse for Europe, damage the Euro, and likely bankrupt some large banks that hold the debt. The Eurozone leaders met last week, and the crisis was resolved! Yippee! Stock markets were euphoric until yesterday, when the Greek President announced that there will be a referendum to accept or reject the terms of the Eurozone bailout, I think. The wording of the referendum is still in doubt, because the Greek government may not last until the end of the week. A parliamentary non-confidence vote could scuttle the whole deal, hell, the referendum could scuttle the whole deal. What is the deal? Basically the Greek debt will be "forgiven" to a degree. That means the debt holders will not get all their money back, like in a bankruptcy and Eurozone partners will cover some of Greece' payments and of course increase their own debt (lets not worry about that now.....).
But what about the referendum, what are the options Greek voters have? Greece looks like it is now stuck between the proverbial rock, and hard place. Should their be a referendum? That timely question was kicked around by two good writers at the National Post. In favour of a referendum: Terence Corcoran, against is Peter Foster. 

     

Atlas Shrugged Part One arrives, finally.

Atlas Shrugged the movie (Part 1) has finally made it to Canada more than 6 months after being released in the USA. I have no idea why it took so long to get here, to what the Toronto locals, like me, refer to as "Hollywood North."
So far, its at only one theatre in downtown Toronto, just half an hours drive from my house. I'm not sure I'll even go. The rest of Canada is out of luck, and FYI for my foreign readers, Canada is huge - really spread out.
I'm fairly discerning about movies that I'll actually attend, and this movie has received mixed reviews at best. The last movie that I saw was Moneyball, and it is well worth the price of admission, and as good as the critics have said. I've learned to wait for the reviews and the Rotten Tomatoes consensus, before I consider plunking down my cash for a movie. Otherwise I wait until a movie comes to DVD or to my TV movie subscription channels.
Atlas Shrugged has played a pivotal role in my life and my view of the world, and no movie could live up to that, least of all the one that has been produced from what I read.
Today a review of sorts appeared in the National Post, written by Peter Foster. Mr. Foster is one of my favourite writers on the Post, click that link in the previous sentence and you will see a list of his recent columns. Read some, and you will understand why I like Peter Foster. His front page review today, can be found here. I think the Post understands that many of its readers have a soft spot for Ayn Rand, so does Peter Foster. His review is positive, and he views the story of Atlas Shrugged from the movie, as an allegory to the events in the news today, lots of us do. It's an interesting view, and as he says, its the reason Rand's work remains "eternally relevant" and her books "still well worth reading."